The good news that came out of TiVo this week was that, encouraged by an initial $105 million patent-infringement ruling against DISH/Echostar, the company is now suing AT&T and Verizon with similar complaints. The bad news is that this is what passes for good news at TiVo these days.

Actually, there was worse news. TiVo’s net subscriptions fell by 146,000 as it lost more customers than it signed up — for the ninth straight quarter. According to TV By the Numbers, TiVo now controls less than 10 percent of the DVR market it helped to create. But as much as TiVo may be entitled to the lawsuits’ proceeds, patent claims are a long, costly and not terribly innovative way to make money.

So it’s interesting to compare TiVo’s fate with that of Netflix, another upstart that’s helped to change how we watch video over the past decade. Both improved the video experience and grew by positive word of mouth. Both endured years of stock volatility amid investor skepticism. Both were positioned to weather, if not benefit from, the recession as consumers seeking to spend less watched more video entertainment in their homes.

But the two don’t seem like kindred companies anymore. As TiVo’s customer base has shrank, Netflix’ subscribers have been growing at an annual rate of around 25 percent for the past several quarters. Cheaper, if less sophisticated, DVRs from cable and satellite providers hurt TiVo’s prospects.

And Netflix? In the five years it took TiVo to fight Dish/Echostar in court, Netflix has used its DVD-by-mail business as a base on which to slowly build an online audience -– without interference from cable or satellite TV providers. And while Netflix has long faced a deep-pocketed competitor in Blockbuster, it’s done an admirable job of not only holding its own but taking market share away from the retailer.

The key difference in their approaches seems to lie in just how much they’re willing to pay to grow and maintain a customer base. In a way, Netflix’s Watch Now is a very crude on-demand video service, especially when compared with TiVo’s software. Netflix could have made it fancier, but it focused on price competition with Blockbuster.

As a result, Netflix is in a position to keep innovating in streaming video, forging relationships like the one it has with Microsoft’s Xbox as well as TiVo itself, and may be seeking similar tie-ups with other companies. The market for streaming broadband content to TVs and other devices is still young and growing slowly. Netflix’s patient approach, coupled with its focus on keeping prices low, is likely to serve it well in the long run.

When was the last time you rented a DVD from a Blockbuster store? If it was recent enough for you to remember the exact date, you’re in a shrinking club.

The video retailer behemoth that stomped many a mom-and-pop store out of existence is now finding people are renting fewer of its DVDs. Rentals at its U.S. locations fell 2.6 percent in the last three months of 2008 (in a conference call, CEO Jim Keyes blamed Hollywood for producing crappy movies), while sales of video games, game consoles and used DVDs rose 37 percent.

In other words, the epic Blockbuster-Netflix battle that has waged for several years isn’t quite over, but Netflix is doing a great job of bloodying up its adversary. So Blockbuster is hoping to fare better against GameStop and Amazon.com.

Just how bad is it for Blockbuster? As was made clear when executives discussed the company’s latest quarterly results on Thursday, it’s definitely not going bankrupt. Well, at least not this year. Instead, lenders are giving it another year to repay a revolving credit facility that was coming due this October. (Bankruptcy wouldn’t necessarily mean closing all stores, as Circuit City did. It could just restructure debt and position it for a turnaround.)

Blockbuster’s aggressive attack on Netflix’s DVD-by-mail model hasn’t worked for a few reasons: Shifting prices of subscriptions confused, then alienated users. Blockbuster poured energy into copying a successful model, not innovating it. Above all, it was unwilling to scale back its costly store chains, instead creating an awkward store-mailbox hybrid that never quite worked.

“I can tell you I never want to see the movies that come by mail,” Keyes said in the earnings call, sounding a bit like someone trying hard to enjoy his sour grapes.  Instead, Blockbuster is forging a digital strategy with its set-top boxes and kiosks selling DVDs and digital downloads. Keyes said 10,000 kiosks will by deployed over 18 months.

So it’s not over for Blockbuster, but it’s lagging behind Netflix – which, in the meanwhile, has focused on improving its own mail-centric model, while gradually rolling out a catalog of streaming videos that is now 12,000 large. Consumers are now flocking to Netflix as a low-cost source of movie entertainment in the recession. Netflix signed up its 10 millionth customer in February. Its stock is up 31 percent over the last six months. Blockbuster’s is down 73 percent.

So instead of having a recession-resistant business, Blockbuster has become yet another company struggling in the recession. It warned that investors will be hearing about “going concern” risks — that is, risks it can’t pay debts and avoid consequences like bankruptcy.

As Keyes said, “We think that frankly there will be a lot of companies in a similar situation receiving opinions of this sort, and given the tightness of the credit markets these days we are not going to be alone.”

Thoreau put it much better. “If misery loves company, misery has company enough.” Maybe they can all hang out together and watch a movie. I recommend Netflix.

Remember all those stories and reports about how the writers’ strike was driving TV viewers over to the Internet? Limelight Networks wants you to forget them.

After posting a larger-than-expected loss for its most recent quarter, Limelight says the current quarter won’t be much better. Why? It’s those pesky picketing writers, who are costing Limelight $1 million this quarter in lost business. And they’ll cost Limelight millions more this year, even though they went back to work last week.

Limelight, which like Akamai makes money by shuttling high-bandwidth digital content around the Internet, said big customers are trimming their online spending until the release of new programming returns to normal.

Interestingly, although the strike began in early November and lasted for most of the most recent quarter, Limelight says it had little negative effect on its earnings during that quarter. But it’s urging Wall Street to revise down their future revenue projections. Limelight, whose shares fell 4 percent Tuesday before the bad news, saw them sink another 15 percent after they reported.

This is quite the contrast from Akamai’s recent report. Akamai said the use of online video was booming last quarter, pushing the company to surprisingly strong profit. Akamai also raised its own estimate for revenue this year to a growth rate of 28 percent.

It’s funny that the writers’ strike is hurting Limelight, but not Akamai. Of course, Akamai could suffer as well, but it’s at least as likely that customers are pulling away from Limelight because of the costly patent lawsuits brought by Akamai and Level 3, not to mention the brutal pricing wars in the CDN market.

Kevin Kelleher is a writer living in the San Francisco Bay Area. He has a regular stock column at TheStreet.com and is a contributor to Wired, Business 2.0 and Popular Science. He has previously worked at Bloomberg News, Wired News and The Industry Standard magazine.