Netflix
Blockbuster also will sell TiVos DVRs in stores and on its Web site, the companies said today in a statement. Financial terms werent disclosed. The Blockbuster On Demand service, offering film rentals and sales, will be available through TiVo devices in the second half of 2009, the companies said.
Blockbuster and Netflix, its mail-order competitor, are seeking new outlets for movies as more consumers look online for entertainment. Netflix began renting films on TiVo, the Alviso, California-based DVR pioneer, last year and has focused more on Internet streaming as its future.
“We love that its easy to use,” Kevin Lewis, Blockbusters senior vice president of digital entertainment, said of TiVo in an interview. “Its available when you want it and in the place you want it.”
Customers will be able to rent new releases for $3.99 and older films for $1.99, and watch them instantly on their TVs through TiVo DVRs. Dallas-based Blockbuster currently sells and rents movies for download two to four weeks after the DVDs hit stores, Lewis said. The company plans to embed its service in Vizio TV sets, among other devices.
The Netflix streaming service is available through at least five products, including TiVo recorders, Microsoft Corp.s Xbox 360 and LG Electronics Inc.s Blu-ray DVD player, according to the companys Web site. Los Gatos, California-based Netflix uses a subscription model, while Blockbuster charges per download and uses subscriptions for its mail-order service.
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Blockbusters revenue has declined in three of the past four years as it battled Netflix and Coinstar Inc.s Redbox Automated Retail LLC, which rents DVDs through kiosks. Netflixs sales have climbed each year since 1998, reaching $1.36 billion in 2008. That compares with $5.29 billion at Blockbuster.
Mark Wattles, founder of the Hollywood Video chain, reported on March 16 that he holds a 5.7 percent stake in Blockbuster and expressed confidence in the companys financial stability. Blockbuster reported later in the week that that some of its largest lenders extended a credit facility through 2010.
Auditors may raise doubts about the companys ability to continue, possibly triggering a default if Blockbuster cant gain concessions from additional lenders, the company said on March 19.
TiVo, which had 3.34 million customers as of Jan. 31, also offers movies through Amazon.com Inc., the worlds largest Internet retailer. Films are typically available to rent for $2.99 or $3.99 on the same day theyre released on DVD, according to TiVos Web site.
Blockbuster closed unchanged at 73 cents yesterday in New York Stock Exchange composite trading. The shares have declined 42 percent this year. Netflix, up 45 percent in 2009, rose 4 cents to $43.44 in Nasdaq Stock Market trading. TiVo, down 2.4 percent for the year, sank 27 cents to $6.99 on the Nasdaq.