Blockbuster and TiVo have worked out a mutually-benefiting partnership, as a result of which Blockbuster intends bringing its 'On Demand' service to TiVo; and DVRs from TiVo will become available at the Blockbuster stores. From Blockbuster's standpoint, the company will get a new channel for its fledging service, which has been pushed to a corner by Netflix.

The proposed deal would allow TiVo subscribers with Series 2 or higher boxes, plus a broadband Internet connection, to rent and procure movies on-demand from the vast collection of the video store chain. This would give TiVo a desirable expansion to its current line up, over and above its current video on demand (VOD) offerings from Amazon's Unboxed and Netflix's streaming services.

The over 10,000 Blockbuster will be available to the entire TiVo lineup in the second half of the year. Though there has not been any disclosure regarding about the prices related to the services, they would likely to be similar to the present Blockbuster. com prices - at $2-$4 for rentals and more than $10 for purchases.

The Blockbuster-TiVo move mainly underlines the customer-retention strategy, by the way of extended customer service. To make the move all the more attractive, TiVo would have to look for exclusive opportunities for its viewers, while Blockbuster needs to offer more original and unique features to its members.