Dronamraju Ravi Prakash

Late thursday night, Tivo and Netflix announced a partnership to figure out movie downloads. Essentially, it's announcement of letter of intent to develop products together that allow movie downloads. No terms were disclosed, no insight was provided into how this service is going to work or when it is going to launch.

Basically, they said, "Hey! we think we should work together and we are planning to". Big Deal!

However, it's a more of a big deal for TIVO stock than for Netflix (NFLX) stock. Tivo, has been facing an onslaught of cheaper imitators in it's space. They have not been able to demonstrate growth for their product. Infact, DishNetwork supplied more DVRs than TIVO in total. It also seems that their deal with DirecTV is falling apart.

This potential venture into movie downloads puts TIVO in a position to become a platform for video-on-demand content delivery to people's TVs. That is ofcourse, if TIVO can figure out how they can deliver the movie to consumer's Tivo box. It better not be a phoneline.

As for Netflix, i guess this gives them a way to participate in the broadband world. However, this is no additional advantage for Netflix. TIVO can potentially strike these deals with all of the netflix competitors. Yea, netflix might be a player in a downloadable world, but so can it's competition.