That's A Wrap! TiVo, Blockbuster Co-Star In Movie Deal

The program, Blockbuster OnDemand, works with TiVo Series2, Series3, TiVo HD and TiVo HD XL DVRs.

In addition, the electronics giant will now sell TiVo DVRs in its physical stores and on its Web site via its by-mail service, giving both companies new distribution channels. The service is slated to launch sometime in the second half of the year.

TiVo has been agnostic in hooking up with digital movie retailers. The company also has agreements with Amazon.com as well as Netflix. The new deal could help Blockbuster compete more effectively with Netflix, whose movie by-demand service has eaten into Blockbuster's profits.

Blockbuster also said that it plans to expand its offerings beyond TiVo.

"You will see us in a large number of other devices going forward," Kevin Lewis, senior vice president of digital entertainment at Blockbuster, told Reuters. "We need to be in the normal places that consumers want to watch movies."

Part of that plan includes offering its services on Apple devices, Lewis told Reuters, but did not elaborate.

"The challenge of being a multichannel retailer is you no longer can think only about the impact on the other leg," said Lewis. "You have to think about what the consumer wants. We are the only [company] in the world that can deliver [via] stores, digital downloads, kiosks ... across all these channels."