Media Money with Julia Boorstin

TiVo Gets Musical With RealNetworks


DVR giant Tivo and RealNetworks , which runs the Rhapsody music service -- are announcing a partnership. Starting today TiVo customers will be able to access Rhapsody's 4 million song library from the TiVo interface on their TV set.

It seems like a win win. RealNetworks gets to offer its subscribers another way to access the music library, another way to differentiate its music service from Napster or iTunes, and it gets to access a huge number of potential subscribers ($13 a month) by giving TiVo users a 30-day free trial.

And TiVo gets another service to better compete against other DVR services from the likes of competitors like Comcast. And this further solidifies TiVo as the entertainment hub of the living room. The fact that Tivo's connected to the internet gives your TV that much more access to virtually infinite content--whether its music or TV shows.

But what does this mean for TiVo's big picture? TiVo's stock has bounced back a bit. It's hooked up with Amazon's Unbox digital download service for movies and TV shows, and with Yahoo for access to photos. And just last week TiVo made gains in its copyright infringement lawsuit against EchoStar's DVR. (An appeals court indicated it would deny EchoStar's appeal and rule in favor of TiVo).

CEO Tom Rogers has been pushing to make TiVo more than a DVR--an entertainment destination. TiVo's real advantage--it's the easiest way for consumers to hook up TVs to the Internet. But this new RealNetworks TiVo service isn't without its flaws--you can't use the service to transport songs from TiVo to a mobile device or to access music around the house, just from your TV that's hooked up to TiVo.

The question is whether this new service will help TiVo make gains against all the new DVR competitors who are stealing marketshare, and whether that can save the company from Wall Street's perspective.

Questions?  Comments?