TiVo will introduce a “product purchase” feature on Tuesday in partnership with the Internet retailer Amazon.com. Owners of TiVo video recorders will see, in TiVo’s various onscreen menus, links to buy products like CDs, DVDs and books that guests are promoting on talk shows like “The Oprah Winfrey Show,” “The Late Show With David Letterman” and “The Daily Show.”

In the months ahead, TiVo plans to begin offering this feature to advertisers and programmers, so that the chance to buy products and have them delivered will be presented to viewers during commercials and even alongside product placements during live shows.

In a move that signals a possible thawing of Google Inc’s relations with Hollywood, its YouTube unit has reached a deal to feature film clips from Lions Gate Entertainment Inc on the video-sharing site.

Google Chief Executive Eric Schmidt announced the deal at an Ad Age/William Morris Agency conference on Wednesday and said it would give viewers access to scenes from their favorite Lions Gate movies, accompanied with ads.

Lions Gate later confirmed the deal.

“There are things in our library like ‘Dirty Dancing’ that have been watched tens of millions of times and it will be nice to get paid for that and to set viewers in the direction of buying movies,” Lions Gate Vice Chairman Michael Burns said in a phone interview.

Lions Gate, also home to the popular “Saw” horror movies and Oscar winner “Crash,” would appear to be taking more of an “if you can’t beat ‘em, join ‘em” approach towards YouTube.

This is in sharp contrast to media giant Viacom Inc, owner of Paramount and MTV Networks, which has sued Google and YouTube for $1 billion, accusing them of copyright infringement by enabling unauthorized viewing of its shows like “The Daily Show” and “The Colbert Report.”

Web retailer Amazon.com Inc will introduce a new online store of TV shows and movies on Thursday, called Amazon Video on Demand, The New York Times said.

Customers of Amazon’s new store will be able to start watching any of 40,000 movies and television programs immediately after ordering them because they stream, just like programs on a cable video-on-demand service, the paper said.

The service is different from most Internet video stores, such as Apple’s iTunes and the original incarnation of Amazon’s video store, which require users to wait as video files are downloaded to their hard drives.

Amazon could not be immediately reached for comment.

Amazon has also struck a deal with electronics giant Sony to place its Internet video store on the Sony Bravia line of high-definition TVs, the paper said.

Amazon would pursue similar deals with other makers of TVs and Internet devices, Bill Carr, Amazon’s vice president for digital media, told the paper.

Amazon Video on Demand will be accessible to a limited number of invited Amazon.com customers on Thursday before it opens more broadly to other users later this summer.

Consumers may be tightening their belts, but that reduction apparently hasn’t affected DVD sales just yet. In fact, spending on DVDs and Blu-ray discs during the first half of 2008 showed a slight increase over the same period a year ago, according to data collected by Home Media Magazine. Spending on rentals rose even more, indicating that perhaps part of consumers’ money-saving efforts involve cozying up to a movie at home for entertainment instead of heading out for a night on the town—or downloading from the Internet.

Home Media found that sales of DVDs and Blu-ray discs rose from $6.8 billion in early 2007 to $6.87 billion in the first half of this year—a modest increase of 1.1 percent. This number appears to coincide with “studio reports” saying that unit sales were also up 1.1 percent to 412.3 million discs in the first half of 2008, according to the Hollywood Reporter. Rentals increased by 2.6 percent, from $3.7 billion to $3.9 billion.

Analysts seem to think that these numbers also serve as proof that downloading—legal or illegal—is not hurting DVD sales as much as Doomsdayers would like to think.

As much as we complain about the high prices of standalone Blu-ray players, in some ways the high prices of Blu-ray movies are even more frustrating. Warner Home Video has taken a step in the right direction, by announcing that the company will offer discounted pricing on select titles this fall. Blu-ray buyers can expect prices between $17 and $20, which is a lot more than DVDs sell for, but less than the $20-$30 prices Blu-ray discs currently go for.

While there isn’t a complete list of movies that will be available at this lower pricing, Video Business reports that The Fugitive, Enter the Dragon, Clockwork Orange, The Shining, The Aviator, Road Warrior and Swordfish will get the discount. Additionally, some newer movies will get a smaller price cut, including 300, The Departed, I Am Legend, Ocean’s 13 and We Are Marshall.

Microsoft Corp.’s Xbox 360 video game console will be able to stream thousands of movies over the Internet, thanks to a deal announced Monday with Netflix Inc. that highlights the way gaming devices are expanding into all-purpose home-entertainment hubs.

The arrangement, revealed at the E3 Media & Business Summit in Los Angeles, will let Netflix subscribers stream 10,000 movies and TV shows to Xbox consoles for viewing on television sets, beginning this fall. Xbox had movies and shows available for download before, but only half as many.

“This generation of consoles will change the face of home entertainment more than any other generation before,” said John Schappert, corporate vice president of Microsoft’s interactive entertainment division.

As Microsoft vies for a stronger foothold in the living room, so is rival Sony Corp., which has tried to make its PlayStation 3 into a broader entertainment device by including Blu-ray high-definition DVD players in the consoles.

The deal with Microsoft also marks an important expansion for Netflix, whose 18-month-old streaming service - which supplements its DVD-by-mail program - has been available on computers instead of TVs, unless consumers had bought a small streaming device from a Netflix-backed startup called Roku Inc.

Microsoft already has sold more than 10 million Xbox 360 consoles in the United States. More than half of Xbox 360 owners pay $50 a year for a “gold” membership, which will be required for access to Netflix’s “Watch Instantly” library. They also must subscribe to Netflix, which charges $9 per month for the least expensive plan that includes unlimited streaming.

In partnering with Microsoft, Netflix may be building the streaming service to prepare for the day when the convenience and widespread availability of video downloading kills its DVD-by-mail service.

Google has released its free Google Media Server to bridge the gap between a PC and a TV. A Universal Plug and Play device is needed along with Google Desktop gadgets and search. An analyst noted that Google Media Server is aimed at technology-savvy consumers who know what UPnP is, unlike solutions from Apple, Inc. and Microsoft.

Having staked out a position on your PC and many mobile Relevant Products/Services devices, Google now has its sights on your living room. Late last week, the search giant announced the release of a free beta version of Google Media Server, a Windows application that seeks to bridge the gap between a PC and a TV.

That gap is between the explosion of TV programs, movies, music and homemade videos on the Web and television sets. A variety of solutions have been launched by Microsoft Relevant Products/Services, Apple and others, and now Google is entering that ring.

Its Media Server uses Google Desktop gadgets as the administration tool and desktop search to find media files. The user will also need a Universal Plug and Play (UPnP) device like Sony’s PlayStation 3, Microsoft’s Xbox 360, Hewlett-Packard’s MediaSmart high-definition televisions, and other consumer devices.

Digital music seller Rhapsody is launching a $50 million marketing assault on Apple’s iTunes, offering songs online and via partners including Yahoo Inc and Verizon Wireless, Rhapsody said on Monday.

The songs will be sold in MP3 format, which means users of the Rhapsody service will be able to play them on iPods.

Before now Rhapsody, jointly owned by Real Networks Inc and Viacom Inc’s MTV Networks, had focused on a subscription service, allowing unlimited song streaming for $13 to $15 a month, rather than selling downloads.

But Rhapsody Vice President Neil Smith said the fact the service has not been compatible with Apple Inc’s top-selling iPod digital player has limited Rhapsody’s reach.

“We’re no longer competing with the iPod,” Smith said. “We’re embracing it.”

Rhapsody also will be the music store back-end to MTV’s music Web sites and iLike, one of the most widely used music applications on social networking site Facebook.

The music giant is suing social-networking site Hi5, video advertising start-up VideoEgg, and 10 unnamed defendants for allegedly infringing on the copyrights of those and hundreds of other pop throwbacks.

The lawsuit alleges that Hi5 users have uploaded and disseminated hundreds of music videos the company owns rights to. VideoEgg is on the hook because it’s a former partner of Hi5, and those allegedly infringing videos were uploaded to its servers.

Sony says it will start a movie download service for its PlayStation 3 home console this summer in the U.S.

Kazuo Hirai, who heads Sony Corp.’s video game unit, said Thursday the service will be offered in Japan and Europe at later dates, although details won’t be available until next month.

Hirai said the company will strengthen its network services and further cut costs to achieve profitability in the Sony gaming business in the current fiscal year ending March 2009.

Challenging RIAA subpoenas can be costly, and not just because college kids have to dig deep into the sock drawer to pay lawyers of their own. Ars has learned that the RIAA’s legal campaign against students is now built on escalating penalties; if you force the RIAA legal team into action, then end up settling, you could end up paying more than that initial $3,000. A lot more.

When college students are fingered by the RIAA’s “pre-litigation letters,” most schools pass the letters along and let students make their own decision about challenging the issue in court or settling for around $3,000. That’s not cheap, but the RIAA has recently been making it far more expensive for students who try to fight. If a student doesn’t respond to a pre-litigation letter and the RIAA has to go to court to get the name, the settlement fees goes up to about $4,000. And if a student decides to challenge the RIAA’s subpoena or otherwise delay a trial, the price jumps dramatically to $7,000 or $8,000.

The Motion Pictures Experts Group, otherwise known as MPEG, will meet this month in Germany to consider making a new digital audio format called MT9 an international standard.

Developed by the South Korean company Audizen, the MT9 format — commercially known as Music 2.0 — splits an audio file into six channels, such as vocals, guitar, bass and so on. Users playing the track can then raise or lower the volume on the different channels like a producer on a mixing board, to the point of isolating a single item.

According to the Korea Times, its inventors say the new format will replace MP3 as the standard for all digital music. But certain music industry realities stand in the way of their goal.

From a technical perspective, replacing MP3 with a new digital music standard would be rather easy. Digital retailers in a matter of months could refresh their entire database with music containing the new format — just as Napster and Wal-Mart quickly switched from digital rights management to non-DRM formats.

But to do so, these retailers would need their label partners to provide them with music encoded in the new format, meaning that all the major labels and the host of independents would need to one day agree to start using a new technology to sell their music.