TiVo Inc. announced its new partnership with Netflix Inc. which will provide customers with significantly more options when it comes to their video selection. TiVo plans to offer by the end of the year a free service to all of its subscribers allowing them to use their HD television sets to watch streamed videos from Netflix.

The two companies have scheduled some tests in several thousand homes, in order to make sure that the service will be reliable for its release in December.

Netflix is looking to make its online service Watch Instantly more appealing and move it from the PC to the TV in order to successfuly deal with the competition brought by Apple Inc. and Amazon.com Inc. For now, Netflix’s online offer provides close to 12,000 movies and TV episodes, which is far less than what the company offers for phisical home delivery. Still, its officials announced that the archives will soon be significantly bigger looking to appeal to a wider audience. For now users can find titles such as Ratatouille, Casablanca, CSI, No Country For Old Men, Hanna Montana, 2001: A Space Oddyssey, Ray, The Sopranos, The Last Samurai, A Night At The Museum, Walk The Line and so on, covering all the genres from comedy to drama and thrillers.

In its constant quest for new business opportunities, Netflix signed a deal with Samsung Electronics Co Ltd, using its Blu-ray DVD players to to view its streamed video and another similar deal with LG Electronics for the use of its Blu-ray DVD players. Other partnerships include deals with Microsoft Corp’s Xbox 360 videogame consoles and also Roku Inc.

"Our strategy is to get our software embedded into a wide range of devices," said Netflix Chief Executive Reed Hastings in an interview. "These are all deals that will grow and impact year after year," he added.

One of TiVo’s most popular services is the one enabling YouTube’s videos on the users’ televisions. The feature has been used by more than 65 percent of the company’s subscribers and this type of attractive options is exactly what the company is looking for now. "I think everyone's trying to figure out the right business model, and they want to get their content on as many platforms as available," explained Tara Maitra, vice president and general manager of content services at TiVo. She also added that the company is looking to become the complete source of entertainment content so that users will no longer have to subscribe to several services in order to get everything they want.

Netflix has a long way to go before bringing closer the offer of its two content formats. The rental service offers more than 100,000 DVD titles and the online service, just as mentioned above, a little over 10,000. This type of home entertainment is already extremely popular and it is expected to go through the roof in the next few years, with customers finding the services faster and easyer.