Marketing synergy can only happen if the basic laws of introducing a new consumer product are followed. The new product has to look and feel like something consumers already have and then improve upon it on three fronts’quality, convenience and price.
That being said, Amazon’s new partnership with TiVo on a video download service seems to fit the bill. It lets users watch video purchased on the Internet and sent to a home television hooked up to a TiVo set-top box.
According to a Reuters report, Amazon Unbox on TiVo extends the online retailer’s Unbox download service to more than 1.5 million TiVo Inc. subscribers whose boxes can access the Internet via a high-speed connection.
Industry analysts say the service shows content companies may be embracing TiVo as both a potential partner and a distribution platform. In its introductory offer, TiVo is giving away $15 in free movie and TV show downloads to those who sign-up. Television show episodes go for $1.99, and most movies cost between $9.99 and $14.99. Amazon and TiVo are jointly shouldering the marketing cost for the new service’s introduction.
By going directly to the TV, Amazon’s TiVo partnership takes downloads a step further than online video stores like those of Wal-Mart and Apple, which are geared toward PCs or portable devices. PricewaterhouseCoopers estimates that the Internet video download business will generate $3.7 billion in annual revenue by 2010.
TiVo has a long way to go to compete with Apple, which has sold millions of iPods than can download video from iTunes. Only about 600,000 users have hooked up their TiVo box to a broadband connection, but Tara Maitra, vice president of content services at TiVo, says that is “a positive.”
“The rate at which we went from zero to 600,000 has happened very quickly. Something like 60 percent of new boxes are connecting, so certainly the level of interest for having the TiVo on a home network is growing,” Maitra says.