Movie rental company Blockbuster ties up with video recorder maker TiVo

Blockbuster Inc. will bring its movie-download service straight to the television set thanks to a pact it announced Wednesday with digital video recorder (DVR) pioneer TiVo Inc.

As with similar deals TiVo has struck to make digital video services from Amazon and Netflix accessible from its set-top boxes, no money will change hands between the companies. But Blockbuster also said it would sell TiVos at many of its 4,000 stores in the US, taking a typical retailer's cut of sales. Blockbuster content will be available to purchase or rent on TiVo Series2, Series3, TiVo HD, and TiVo HD XL DVRs, TiVo said.

''We are excited to be teaming with TiVo, the company that created the DVR, to make Blockbuster's entertainment content readily available to their millions of subscribers,'' Jim Keyes, CEO of Blockbuster, said in a statement. ''Ultimately, our vision is to work with TiVo so that their subscribers can access movies not only through our On Demand service but also from our stores and through our by-mail service as well.''

"When consumers walk into one of the thousands of Blockbuster stores entertainment for the home is on their minds - it could not be more natural to have them exposed to the world of millions of entertainment possibilities for the home that the TiVo Service provides," said Tom Rogers, president and CEO of TiVo.

Blockbuster On Demand will be accessible only to the approximately 800,000 TiVo owners who have broadband Internet connected directly to their TiVo boxes. The offering is expected to be available in the second half of 2009.

Joe Miller, a TiVo senior vice president, said that adding another recognized entertainment brand would help the company sell more devices. ''Typically you will find consumers reward and appreciate companies and technologies that take an open approach to business, and that is what we are doing here,'' he said.

Blockbuster rival Netflix has cut severely into Blockbuster's market share over the past several years with its discs-by-mail service, forcing Blockbuster to adapt with an online offering of its own. Now, Blockbuster wants to make sure it can offer an alternative to Netflix's movie-streaming service.

Blockbuster's move comes less than a week after it reiterated its determination to remain a going concern despite credit difficulties. The company said three of its largest creditors have agreed to extend its revolving-credit facility through 30 September, 2010, alleviating concerns about a debt payment that would have been due this August.  (See: Video rental firm Blockbuster looking to raise capital, denies bankruptcy rumours)