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TiVo and Netflix 'team for movie downloads'

Partnership brings Java full circle

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Netflix and TiVo are to team up to deliver movies over broadband, according to NewsWeek. The magazine expects the partnership to go public later this month, although neither company would comment, and details on pricing and availability have yet to be disclosed. It's hardly unexpected: the two companies are natural partners and are already close: TiVo's CEO is a Netflix board member.

In January, TiVo purchased Strangeberry, a startup founded by Arthur van Hoff, one of the developers of the Java language (he wrote the compiler, debugger and designed many of the classes). Only a handful of analysts have seen Strangeberry in action, but it's described as a TV-centric router for managing all kinds of video and audio content around a home network. (TiVo passed up the chance to license Strangeberry in 2002). Ironically, this brings Java full circle, as the language and environment was initially developed with set top boxes in mind.

Although they're both household brands, Netflix and TiVo face a tough fight from telecommunications giants and media pigopolists with deep pockets. TiVo pioneered the concept of the PVR (personal video recorder), but has yet to discover the knack of making money - it forecasts an operating loss of $41m on revenues of $28m in the current quarter. Netflix, the online movie DVD retailer, is faring rather better, and has moved into the black this year. In its most recent quarter Netflix turned in a gross profit of $3.3m on subscription revenues of $63m, but the expenses figure includes large promotional and R&D costs.

Despite their brand values, both TiVo and Netflix are aware that their raison d'etre is simply another feature of what the large media holdings and cable providers already provide. Punters don't really care how the movie arrives: only that it's there, and plays when you click that big green button. ®

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