Blockbuster to jump aboard Tivo and Apple?

As the video-on-demand industry continues to mature, more and more "mashups" are being drawn out.  Today's is a big one.  In an upcoming update, Tivo will now incorporate Blockbuster's online video store into its players.  With a fairly substantial base of hardware installations, this is a big win for Blockbuster who has been behind the curve with competitors like Netflix, Amazon and Apple innovating at a much faster clip. 

Speaking of Apple, Blockbuster laid this one out there:

"You will see us in a large number of other devices going forward," said Kevin Lewis, senior vice president of digital entertainment at Blockbuster, who added that the company also plans to makes its system available to Apple Inc's products. "We need to be in the normal places that consumers want to watch movies," he said.

Although a AppleTV with Blockbuster would be great for consumers, this would seem to be a direct competitor to Apple's movie/video sales business and wouldn't really seem to be a good idea for Apple on the surface.   It is thought that Apple subsidizes the cost of the AppleTV somewhat with video sales.

Blockbuster might just be implying that there is a web interface to the Blockbuster service just like Amazon and Netflix have.