October 1, 2004
LOS GATOS, Calif. - Netflix Inc. and TiVo Inc. made official Thursday their deal to create a service that will use high-speed Internet connections to pipe DVD-quality movies into the homes of their mutual subscribers.
The companies made the announcement about three weeks after confirming that they were talking about a possible deal.
Los Gatos-based Netflix has attracted 2.1 million subscribers to its $21.99-per-month service, which mails up to three DVDs at a time after customers place their orders on the Internet. The service, which draws upon Netflix's library of 25,000 DVD titles, doesn't charge late rental fees - a concept that has forced video rental giant Blockbuster Entertainment to change its ways.
Alviso-based TiVo makes digital video recorders that let viewers easily record TV shows onto hard disks, skip commercials and pause live broadcasts. About 1.9 million subscribers pay a $12.95 monthly fee for TiVo's service, which has inspired a variety of clones.
As a result of the agreement, TiVo chief executive Mike Ramsay resigned from Netflix's board of directors.