Amazon and TiVo Grab Some

Amazon and TiVo running to grab some of the Internet video download market.

Today Amazon.com announced the launch of a new service that allows users to watch video purchased online via their TiVo set-top boxes. Announced last month as "Amazon Unbox in Tivo", this service provides the Unbox downloads to 1.5 million TiVo subscribers. Just the other day I was wondering what all the TiVo owners were going to do with worthless TiVo's and now we have the answer!

TiVo shares climbed after the announcement, so other people must have been wondering too. Now analysts think that content companies may be looking to Tivo as a distribution platform. This would be very helpful to many people who do not have to render their TiVo set top boxes useless and spend hundreds more buying storage or PC upgrades.

According to a press release by Reuters/Yahoo, TiVo's introductory offer is a $15 free movie or TV show download for those who sign up. TV show episodes go for under 2 bucks each and movies are from $10 – $15 dollars each. This news comes on the heels of technology geared to shift viewers towards the Internet.

Amazon's partnership with TiVo puts them into direct competition with Wal-mart and Apple, who are geared more towards PCs and portable storage devices. The TiVo/Amazon venture also separates them from cable and satellite providers who have generic DVR set top devices.  Some 600,000 users have connected their TiVos to broadband connections so far. This is a long way from scratching Apple's market share, but the company sees it as a big step.   

We will see more such associations as the increasing pressure of Internet content is brought to bear on traditional outlets. This is a very smart move by TiVo and Amazon because of the obvious relief of a large "pain point" for users of expensive traditional hardware and user flexibility factors. This is really great news because we are now seeing traditional hardware/service players bend to the trend of Web 2.0 and above. We did not expect traditional business to lie down and die, only to change with the times!