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Wednesday, 05/24/2006 8:42:20 AM

Wednesday, May 24, 2006 8:42:20 AM

Post# of 286611
NEW YORK (Dow Jones)--TiVo Inc. (TIVO) and Blockbuster Inc. (BBI) quietly rolled out a cross-promotional deal to a small number of customers.

Starting last month, the companies began bundling Blockbuster's online movie delivery service with an 80-hour TiVo series2 box for $29.99 a month. The offer is available through a special link on the TiVo Web site.

TiVo spokesman Whit Clay declined to comment. A Blockbuster spokesman was not immediately available to comment.

This isn't the first time TiVo has shown an interest in movie distribution. The company said in September 2004 that it was working with Netflix Inc. (NFLX) to develop a service that would let customers rent videos by downloading them onto a TiVo box. Companies were talking with Hollywood movie studios to hammer out new distribution agreements.

Those distribution agreements haven't been coming about and have delayed the venture. In October, Netflix Chief Executive Reed Hastings said the company was pulling back plans because of the lack of available titles from studios.

"We love those guys, and we just don't have any content," Hastings said during that conference call with analysts.

Blockbuster's expansion into the online space - about a year old - has not gone unnoticed by Netflix. Last month, Netflix filed a lawsuit against Blockbuster earlier this year alleging patent infringement. The complaint, filed in U.S. District Court in San Francisco, focused mainly on Blockbuster's online "wish lists" that prioritize DVD requests. Netflix, based in Los Gatos, Calif., also believes other patents have been copied. Spokespersons at Netflix could not be reached immediately.

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