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TiVo: Saved by Comcast?

By Susan B. Shor
Mar 15, 2005 11:57 AM PT

TiVo and Comcast today announced a deal that may be a reprieve for the beleaguered digital video recorder company. One analyst, however, wonders what the benefit is for TiVo's partner.

TiVo: Saved by Comcast?

"I'm a little perplexed," Todd Chanko, media analyst at Jupiter Research, told TechNewsWorld. "I don't quite know what's in it for Comcast. It's clear that any kind of deal TiVo can get a hold of is good for them."

TiVo-Branded Service

The non-exclusive deal calls for TiVo to develop software specifically for Comcast, which will not use TiVo's set-top boxes but will be branded with the TiVo name. Comcast already offers DVRs from Motorola and Scientific-Atlanta in different markets. The new service is expected to be available to consumers in about a year, the companies said.

The effect for TiVo was immediate: Its stock jumped almost 50 percent on the news.

But Chanko is not convinced that consumers will be willing to pay for TiVo's added features.

"First of all, having a machine provide you with suggestions based on viewing, I find it kind of creepy," he said. "The problem they have to contend with is that every week there's already so much television being recorded onto a DVR, what people haven't been able to figure out is how do I squeeze extra hours into my week to watch all this TV I'm recording? Comcast is going to have to do a massive education program among its subscriber base to convince them."

Tough Sell

TiVo, the DVR pioneer, has faced a tough road from its inception in 1997. Trying to convince consumers they should pay for the box and service has been difficult. While those who have the box sing its praises, there are only 3 million of them. It has gotten tougher as cable and satellite companies have entered the market with their own versions of DVRs.

TiVo suffered a blow late last year when its partner, DirecTV, announced it would begin offering DVRs from its sister company, NDS Group. About 60 percent of TiVo subscribers signed up through DirecTV.

Comcast has 21.5 million customers, and about 8.6 million subscribe to its digital service, through which it will offer the TiVo service. The cable company currently offers DVR service for $10 a month, including the box. The companies did not disclose financial details of the agreement.


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