On Tuesday, TiVo pulled another card out of its deck with a service that lets customers download digital movies and TV shows from Amazon.com directly from their TV -- without a PC.
The announcement marks an upgrade in the partnership between the DVR company and Amazon's Unbox service that gives customers access to thousands of programs from networks such as CBS, Fox, Paramount Pictures, Universal Studios, and Warner Bros. The programs cost about $4 for a movie rental and $2 for a TV show.
The companies announced the partnership in February, but during its first iteration consumers had to log on to Amazon.com through a PC to order the movies. Now, viewers need only the TiVo set top box and remote control to download the media.
"This is an evolutionary development that points the way to the future. Both TiVo and Amazon have been innovative leaders," said Phil Leigh, a senior analyst at Inside Digital Media. Leigh said he was not surprised by the announcement, calling it "predictable."
Predictable or not, the move gives TiVo an additional differentiator in an increasingly competitive market for digital movie downloads. Digital downloads are available through online venues such as CinemaNow, MovieLink, and Walmart.com. Customers typically have to purchase additional equipment, such as a graphics card with TV-out capabilities, to display the downloads on a TV screen.
With Amazon Unbox on TiVo and a home network, the movies are purchased through Amazon's one-click ordering process. After the movie has been downloaded, the title will automatically appear in the TiVo's "Now Playing" list with other recorded shows. Consumers can watch the rental movie for 30 days.
Only about 600,000 TiVo subscribers have their DVR connected to a broadband home network. And more than 60 percent of TiVo subscribers receive the service through DirecTV, which means they won't be able to benefit from the Amazon partnership.
"The problem with TiVo is that it has always had great cards but never enough chips," Leigh said. "The interesting thing is that at one time I could have said the same thing about Apple Computer. The partnership with Amazon is a step in the right direction. To break out, something needs to change the way the cable TV operators discriminate against [TiVo]."
What might have changed the landscape in TiVo's favor is legislation designed to enable a retail market for interactive TV services. Cable operators have proprietary systems that essentially lock out third-party DVR services by building the DVR into the set-top box. CableCard legislation came into effect on July 1, 2007 to stimulate competition by forcing cable operators to abandon that lockout system.
"Whether that will create the kind of opening that TiVo needs is impossible to say," Leigh said, "but it's certainly going to improve the situation."