Motorola, TiVo deals extend cable operator's reach
Comcast is moving with deliberate speed this spring to help secure its already considerable influence in the increasingly flexible media universe that digital TV demands. Within a week, the MSO expanded its partnership with Motorola beyond mere set-top boxes and quickly announced another long-term deal with TiVo which may have saved the DVR pioneer from going the way of the dodo.
TiVo simply may be pinching itself right now, hoping its new long-term partnership with Comcast isn't simply a dream. Judging from initial Wall Street reaction, the Comcast deal already has pumped new life into the DVR provider, whose early growing spurt appeared to be stuck on Pause for the last few years. When fair-weather friend and partner DirecTV made it clear at this year's CES that it no longer would require TiVo's services, things looked rather bleak for the little-DVR-engine-that-could. TiVo currently has three million subs (or barely two-percent of TV households) who pay about $10 monthly.
In a separate multi-year commitment with Motorola to purchase more than $1 billion in STB hardware-software, Comcast appears to have made the biggest single financial deal of its kind ever undertaken by an MSO in North America. Although much of the Comcast deal actually extends a current agreement with the nation's largest MSO to purchase boxes, perhaps more significant in the long term is their agreement to form two joint ventures exploring further development and licensing of conditional access and other technologies.
Motorola has been granted a non-exclusive license for MediaCipher, its own conditional access technology, and Motorola and Comcast will jointly manage a new development group. The dual ventures also include securing other licensing for conditional access venues--along with R&D on interactive program guides, as well as providing middleware to competitors.
The addition of TiVo's well-known brand of digital recording capabilities to the Comcast menu is just that--an addition, not a replacement. "We will be creating two DVR options for our customers, " said Comcast spokesperson Jenni Moyer. "We find that customers seem to love the DVR we already offer, which has all the options that you expect in a DVR, like pausing live shows, recording a couple of programs at a time while you watch a third, and so on.
"With the TiVo version, the capabilities will also permit viewers to record movies based, not on titles, but on the names of actors or directors they like. And in a few seconds they can set up to record an entire season of the same series. TiVo software will also allow a subscriber to control his DVR remotely, such as from work, by going online to a special Web site and setting it from their computer," Moyer said.
New TiVo software will be developed exclusively for the MSO, incorporated into Comcast's existing network platforms and run on Comcast's DVR platform--using the dual-tuner, HD- capable, DCT6412 Motorola box. The new DVR service will be marketed with the TiVo brand, and is expected to be available from Comcast in a majority of its markets by late 2006.
Moyer's description of the TiVo box could indicate what Comcast's selling points might include in the months ahead: "They have a really terrific brand and great customer loyalty, and with our TiVo box--you [also] will be able do video- on-demand and high-definition. So you will have all three components--DVR, VOD and HD--all in our Comcast-TiVo box that you don't have now." (In fact, even the regular TiVo service itself does not have those attributes.)
TiVo does plan to continue marketing its traditional stand-alone service as Comcast pushes its own TiVo. Therefore, TiVo could find that it's competing with itself, and Comcast, for customers within Comcast's own markets. "The Comcast version of our software won't be available for more than a year," said TiVo spokesperson David Shane. "And TiVo will continue to be available, of course, in markets where Comcast is not present. In those markets, I imagine, we'll be heavily focused on our standalone."
Shane said his company plans to make its entire suite of TiVo services available for anything that Comcast may wish to include for its subs. "It will be up to Comcast to decide what they may wish to include." Although it's widely presumed that Comcast's TiVo service will cost a few dollars more than the more generic and brand-less DVR now offered by Comcast, no fee structure will be announced for several months. Financial terms of the Comcast-TiVo deal have not been disclosed; the MSO did not make a financial stake, per se, in TiVo.
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