The rumored partnership is finally official. The very brief press release stated:
LOS GATOS, Calif. - September 30, 2004 - Netflix and TiVo have signed an agreement to work together to develop a joint entertainment offering. Under the terms of the agreement, the two companies will develop technology and will work with Hollywood studios to secure content for digital distribution.
As a result of the new agreement and in an effort to avoid any potential conflicts of interest that might develop, Mike Ramsay, chief executive officer of TiVo, submitted his resignation from the Netflix Board of Directors, effective September 29, 2004.
News.com expands on the story:
Rumors have swirled for months that the two companies would strike a deal. Building new services is crucial for both TiVo and Netflix as they confront growing competition from deep-pocketed rivals. Netflix's business is being threatened by larger rivals, including Blockbuster and Wal-Mart Stores. TiVo, which provides both DVR (digital video recorder) hardware and services, faces similar challenges from cable companies and a potential loosening of its partnership with DirecTV.
News.com also gives us more insight into the copy protection that they are testing for the service:
Even if the studios are receptive to a Netflix deal, widespread cooperation won't be forthcoming until the DVD rental service can offer a viable content security system to protect the downloadable films in transit from being pirated--an area where TiVo has clashed with Hollywood in the past.
Aiming to tackle that problem, TiVo said recently that it will support a new version of anticopying software from Macrovision that would make recordings of pay-per-view or on-demand movies inaccessible after a set time period. Macrovision's technology also would disallow attempts to copy digital films to analog devices so that they could then be recopied into digital form for wide distribution, a workaround known as the "analog hole."
Engadget explores a name for the new product and the potential of a Netflix - TiVo merger:
They wouldn’t discuss a date about when they might introduce the service, what it might be called (TiVoFlix? NetVo? NetfliVo?), or any other specifics, but TiVo CEO Mike Ramsay says that the two companies are absolutely, definitely not merging.
Thanks to Brian & Lisa for alerting me to this story.