Amazon, TiVo Bridge PC-to-TV Gap

Consumer reaction to downloading movies and TV programming from the Internet has been less than enthusiastic. For some, it's a hassle to move entertainment content from their PCs to their living rooms.

In recent months, the gadget industry has focused a lot of its resources on cooking up solutions to bridge the PC-TV gap. Yet another such solution was rolled out Wednesday by online retailing mammoth Amazon.com (Nasdaq: AMZN) and digital video recorder pioneer TiVo (Nasdaq: TIVO).

The pair announced that their new service, "Amazon Unbox on TiVo," was ready for prime time.

The service, which was unveiled by the pair last month, allows users of broadband-enabled TiVo devices -- a potential audience of 1.5 million consumers -- to rent or buy downloads of movies and TV programs from Amazon's Unbox online store.

First TV Downloads

"TiVo is putting more power and choice than ever before in the hands of consumers as the first and only DVR company to offer direct movie downloads to the TV," TiVo General Manager and Vice President of Content Services Tara Maitra said.

"Simply put," she continued, "whether it's content you choose from Amazon.com or from broadcast and cable programming, we put it all on your television, in one place, easy to find it, whenever you want them."

TiVo customers with the company's broadband-enabled DVRs can create a link from their TiVo account to Unbox through a simple online registration process. Once the initial setup is complete, eligible movies or television shows can be ordered from Unbox and downloaded directly to a customer's TiVo box via the Internet.

After Unbox content has been downloaded, its title will automatically appear on the "Now Playing" list on the subscriber's DVR. Once viewed, the content need not be archived on the TiVo hard drive, since all purchased video is automatically stored in the customer's online account with Unbox.

Addressing a Major Challenge

"Customers now have even more flexibility and convenience when it comes to enjoying Amazon Unbox," Amazon's Director of Digital Video Boy Price observed "In addition to watching their favorite movies and TV shows on their PCs and portable devices, customers can now watch Amazon Unbox videos on their televisions."

Until April 30, TiVo and Amazon are offering US$15 in free movie and TV downloads for anyone signing up for the Unbox for TiVo service. Unbox sells television episodes for $1.99 and movies from $9.99 to $14.99. Movie rentals start at $1.99.

Amazon Unbox for TiVo address one of the real challenges facing the movie download business, contends Kurt Scherf, vice president and principle analyst with Parks Associates. "There's been no easy way for consumers to think about moving that content to their television sets," he told TechNewsWorld.

"There are home networking solutions out there that can be cobbled together to do that, but this really ties it all together without having to put one more box in the living room," he observed.

Competing With Cable

Scherf described the TiVo deal as an experiment for Amazon. "If Unbox is around in the next few years, this sets the stage for similar deals that may come to fruition in the future," he maintained.

For TiVo, he continued, the new venture gives the company another way to set itself apart from its competitors in the market. "It's struggling as a company with subscriber growth," he claimed. "This is one more attempt by them to keep differentiated."

It's also a way for TiVo to make itself more competitive with DVR offerings from satellite and cable providers, argued Josh Bernoff, an analyst with Forrester Research in Boston.

"If you're using a TiVo box, then you can't get access to the video-on-demand content that your cable operator probably has," he told TechNewsWorld. "This is a way to duplicate that video-on-demand function for consumers who would rather interact with their televisions through a TiVo."

Living Room Landing

For Amazon, he continued, affiliating with TiVo creates a way for the retailer's original Unbox service to break its chains to the PC. "Part of the problem with Unbox is it lands you on a computer instead of a television set," he noted. "So this is a way for Amazon to get access to the TV set, where consumers would like to consume this content."

"The problem is there's less than two million TiVo subscribers who are in a position to take advantage of this, so it really doesn't reach that many people," he added.

The service also isn't likely to address TiVo's subscription problems. "It may get more people to connect their TiVos to the Internet," Bernoff declared, "but it's not likely to get people to buy more TiVos."