Amazon teams with TiVo for downloadable TV

Online retailer Amazon.com Inc. has joined with U.S. digital video recorder service TiVo to allow customers to play downloadable movies directly on their televisions.

The two companies announced a test version of the new service, called Unbox on TiVo, will begin Wednesday, the day after Wal-Mart announced it would enter what has quickly become a competitive market for downloadable video with its own online video store.

The partnership will allow video downloaded from Amazon's UnBox service to be transferred to the set-top boxes of TiVo's 1.5 million customers in the United States.

"We think this is a breakthrough," said Bill Carr, Amazon.com's vice-president of digital media. "We're providing people with the simplest way to actually play back their digital content on a television set."

Initially, the companies will offer video from CBS, Fox, Lions Gate, Paramount Pictures, Universal Studios Home Entertainment and Warner Brothers. Television shows will sell for $1.99 US an episode, while most movies will be priced between $9.99 and $14.99, the companies said.

Amazon entered the downloadable video market last August when it unveiledUnBox, joining a crowded market that now includes Movielink, CinemaNow, Apple Inc.'s iTunes store and now Wal-Mart, the largest retailer of DVDs.

While video download sales are growing— Apple officials said last year iTunes was selling roughly one million a week— the stumbling block has been that the video is essentially trapped on the computer. Observers say that is what makes the TiVo deal unique.

"Frankly, nobody else has the solution that allows you get something over an internet connection and watch it with the click of the button," said James McQuivey, principal analyst at Forrester Research Inc. "If it's that easy, then they'll be the first. They'll be able to plant their flag."

While TiVo personal video recorders, or PVRs, are not available in Canada, the company does offer the service to Canadians who purchase a recorder in the United States.

Research from the Canadian chapter of the Cable and Telecommunications Association for Marketing said five per cent of Canadians own a PVR, compared to 15 per cent of Americans.

Anumber of technology companies are hoping customers will embrace PVRs once downloadable content becomes available.

Last month Apple Inc. announced plans for Apple TV, the company's own set-top box capable of playing videos downloaded from the internet. Microsoft also entered the market, announcing at the Consumer Electronics Show its Xbox 360 will soon be available to act as a set-top box.