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Blockbuster to Sell, Rent Movies Through TiVo

25 Mar, 2009 By: Erik Gruenwedel


Blockbuster and digital video recording pioneer TiVo March 25 said they had partnered to rent and sell movies and TV shows electronically later this year.

TiVo users will have access to 10,000 Blockbuster digital titles as a progressive download via the DVR set-top box, priced from $1.99 each and movie purchases starting at $14.99 each. The Blockbuster OnDemand feature will be available for users of the TiVo Series 2 and 3 devices, TiVo HD and TiVo HD XL DVRs. Plans also include integrating Blockbuster’s by-mail and in-store physical DVD rental programs into TiVo subscription services.

Additional cross marketing strategies include selling TiVo’s series of broadband-enabled DVRs at Blockbuster corporate stores.

The shift by the Dallas-based No. 1 DVD rental service to integrate Blockbuster OnDemand (formerly Movielink) into TiVo DVRs would appear to be an attempt to usurp the digital rental market currently controlled by Netflix.

Comparatively, Netflix Instant Watch streaming offers 12,000 titles for free to subscribers.

For Alviso, Calif.-based TiVo, Blockbuster’s immense library of new and catalog digital titles represents a formidable value-add to its subscriber base, which has steadily eroded over the years due to the proliferation of deeply discounted DVR set-top boxes by cable providers.

“Ultimately, our vision is to work with TiVo so that their subscribers can access movies not only through our OnDemand service but also from our stores and through our by-mail services as well,” said Blockbuster CEO Jim Keyes, in a statement. “Regardless of a film’s availability — through VOD or on DVD — we want to work with TiVo to provide their subscribers unprecedented access to movie content.”

Blockbuster has seen its stock hammered since disclosing the hiring of a law firm to assist it with financing issues. Edward Woo, analyst with Wedbush Morgan Securities in Los Angeles, who covers Blockbuster, said the TiVo deal would do little to satiate the bears on Wall Street.

"But as part of a strategy aiming to be a broader provider of entertainment, in-store, online, and by mail, I think they have a reasonable chance to succeed," Woo said. "This does seem to be a relatively low incremental cost for both parties."

Indeed, Blockbuster shares were up more than 10% in midday trading.

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