TiVo makes deal with Comcast
March 20, 2005
TiVo has won a contract to supply its digital video recording technology to Comcast. The agreement is expected to boost TiVo’s distribution and quiet doubts about the company’s future.
TiVo’s DVRs save shows to a built-in hard drive, allowing viewers to pause live TV, skip commercials and record dozens of hours of programming. All Rights Reserved
The deal, valued at between $10 million and $30 million over seven years, appeared to reverse the fortune of TiVo, whose shares vaulted more 50 percent, Reuters reported.
TiVo will license its recording technology to Comcast for use in current and future set-top boxes, and extend TiVo’s advertising platform to Comcast’s system. Unlike TiVo’s current distribution deals, the company will not build set-top boxes for Comcast.
The company’s DVRs save shows to a built-in hard drive, allowing viewers to pause live TV, skip commercials and record dozens of hours of programming. Subscribers to TiVo’s service pay up to $13 a month. Cable operators have developed copycat services offered at a discount.
Under the pact, Comcast and TiVo will offer a version of the TiVo service for Comcast’s DVR subscribers in mid-to-late 2006. It will be sold as an alternative to Comcast’s current DVR service, which costs about $10 a month. Comcast did not specify what it would charge for the TiVo system.
Comcast will pay upfront and engineering fees, and also pay TiVo based on the number of Comcast subscribers who sign up for monthly TiVo services. Of Comcast’s 21.5 million subscribers, some 8.6 million receive its digital service, which can support DVRs. TiVo will also build into the set-top boxes the ability to sell certain types of advertising to Comcast subscribers.
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