Why a Netflix-TiVo deal is irrelevant

Herb Greenberg over at CBS MarketWatch, doesn’t think too much of the Netflix / TiVO partnership and has a fair bit of information that seems to sour the deal rather than make it seem as sweet as you might have thought.

In the hoopla over a possible linkup between Netflix and TiVO, something appears to have been lost on investors: Even if the two strike some kind of deal allowing Netflix (NFLX: news, chart, profile) subscribers to access movies by downloading them onto a TiVo for a monthly subscription price or on a pay-per-view basis, it’s unlikely the library of titles will be anywhere near the 25,000 Netflix now claims — at least not any time soon. Ditto Netflix’s plans to offer download services, which the company has suggested will happen next year.

Blame that on a complex web of film rights and so-called use windows granted by movie studios, which are different for “hard goods,” such as retail or DVD-by-mail, and “electronic,” which can include the Internet or TV. “The big ah-ha for a lot of companies is that the availability [of] these movies is gone because of the rights that have already been sold,” says Bob Greene, senior vice president of advance services for the StarzEncore Group.

It’s likely that the vast majority of Netflix movies will have to be streamed rather than downloadable give the way rights are handled for digital vs hard goods. That makes receiving a reduced streaming quality version that much less attractive to me… I was already thinking it would be very difficult to beat the quality and potentially the depth of catalog from the cable players. My current list of movies on demand from Time Warner is quite good, feeling much like a trip to blockbuster used to. Factor on top of that the addition of the video on demand services from all the major premium stations (HBO, MAX, SHO, STRZ) and I’ve got a very nice package of movies, shows and specials that I can watch at anytime at the same (non-HD) quality level I am accustomed to today on my cable system.

Greenberg, goes even further thinking that the TiVO deal is further away than the Newsweek article alluded and that means more pressure on Netflix from Blockbuster with their recently launched subscription service…

As I mentioned the other day in Herb Greenberg’s RealityCheck, the company was making it harder to cancel — making anybody who wants to cancel call in rather than quit online. That meant being put on hold for what can be more than a few minutes. (Interestingly enough, the company switched back to the old way as quietly as it switched away from it.) Then there was the conveniently leaked story to Newsweek about a supposedly imminent TiVo (TIVO: news, chart, profile) deal, which Netflix now says is not on any rollout timetable.

And this just in: Further signs that Blockbuster must be taking a toll on Netflix come from my assistant, Samantha Soga, who received an e-mail Wednesday from Netflix offering a 30-day free trial to “friends and family” of existing subscribers. That’s double the usual free-trial period.

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