Tivo has won a contract to supply its digital video recording technology to Comcast. It’s an agreement that’s expected to boost TiVo’s distribution and quiet doubts about the company’s future.
The surprise deal, valued 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.
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 will pay upfront and engineering fees, and also pay TiVo based on the number of Comcast subscribers who sign up for monthly TiVo service. 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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