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Netflix and Tivo Hook Up

tivo-netflix.jpgIn relationships, timing is everything.  No matter how appropriate a pairing, both parties need to be ready. The stars need to align.    Four years ago, Tivo and Netflix ambitiously tried to hook up to deliver an internet video distribution service.   Unfortunately, the companies weren’t mature enough. Moreover, the marketplace (e.g. movie rightsholders) were not comfortable endorsing such a forward looking union with a license.   Today, things are different.

Rekindling the old flame, Netlfix and Tivo announced Thursday that the’ve joined in partnership.   Starting immediately, the companies will  deliver Netflix’ “Watch Now” on-demand service to Tivo devices as part of a limited test to several thousand households.  A full rollout to all Tivo owners is expected by the end of December.

As is the case with other Netflix Watch Now partnerships (Roku, LG, Xbox 360 etc), there will be no extra charges to use the service. That is, subscribers to both services will be able to watch unlimited volumes of the on-demand programming in Netflix 12k+ program catalog without added fees.

Currently, Tivo has about 3.6m subscribers on its books.  Netflix has about 8.7m.   While there is surely some overlap, for both companies, the partnership is probably more about attracting new customers and growing those tallies than it is about satisfying the old.  

“It’s a natural pairing and we are thrilled to finally be working with them,” said Netflix CEO Reed Hastings.

The Tivo partnership is the latest in what has been a series of  recent “Watch Now” expansions from Netflix.    In the past few months, the company has struck a hardware partnership with Samsung and added significant content partners in Starz, and with CBS and Disney.

In addition to the new hardware partners, Netflix is also presently in the process of rolling out a second generation of the Watch Now software.  Built with Microsoft’s cross-browser Silverlight, the platform expands the programs reach to Apple users and adds additional functionality.  It’s expected to be available to all customers by year end.

Netflix has said in the past that Watch Now is a significant part of its future.  It may be three, five or ten years before it displaces the DVD distribution business, but whenever the time-frame the company is unquestionably preparing for it now.  The timing is a lot better than four years ago.

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