Tivo and Netflix: the underdogs band together

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I love my TiVo Series III.  Indeed, I'm something of an evangelical about it.  But it's hard to convince someone that they should lay out several hundred dollars for a box, and another several hundred for the subscription, when their cable provider will give them a DVR for $5-10 bucks a month.  Yes, the TiVo provides superior menus, searching, and other services.  Yes, it plays podcasts.  Yes, you can copy video to your PC to carry around or edit--but how many people use this? (Aside from me).  And I've really been liking the ability to download movies and shows from Amazon Video On Demand (formerly Unbox).  But I'm not sure that this, too, isn't a minority taste.

As someone who would like to see the company keep going, I was pretty happy to see that yesterday, TiVo and Netflix finally announced that they would be partnering to deliver instant streaming video.  If you have a Netflix subscription (and a TiVo, of course), you can stream all the video you want at no additional charge.  The deal makes a lot of sense:  both companies are struggling, competing with Bittorrent and the cable companies to keep their business models alive.  But together they can offer something that the cable companies will have to step up their game considerably to compete with.  Indeed, the deal makes so much since that people have been waiting for it since 2004, when it was announced with much fanfare and then went nowhere.  Yesterday was the fruition of a long-held dream.

The service isn't perfect, since Netflix's library of movies available for streaming is limited thanks to licensing issues.  And I don't think they're available in Blu-Ray quality, though the Amazon videos I've downloaded have been competitive with my HD movie channels.  (That may be because Comcast compresses it HD signal heavily in order to cram more channels into the pipe).   But at least it will give two companies I'm very fond of a fighting chance.  It's worth remembering that at this point in its lifecycle, a lot of people thought Amazon was going to join the other etailers in bankruptcy.

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Megan McArdle is a columnist at Bloomberg View and a former senior editor at The Atlantic. Her new book is The Up Side of Down.

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