DirecTV and TiVo are back in business again as the US satellite direct to home TV service has said it will offer TiVo service once again, on selected HD DVR accounts.
This is an extension to the agreement that made TiVo famous, and which used to bring in two thirds of its new customers. The two will now develop, market and distribute a new HD DirecTV DVR featuring the TiVo service, and the two will extend their mutual intellectual property arrangements.
TiVo will work to develop a specific version of the TiVo service for the DirecTV broadband-enabled HD DVR platform and it will be delivered in the second half of 2009 and include TiVo’s Universal Swivel Search and TiVo KidZone.
It is unclear if these devices will be made by manufacturers under contract to TiVo or whether they will be part of the NDS designed DVR, and run in software on existing or new NDS designs. TiVo devices, and the TiVo service ceased being used at DirecTV around two years ago, after the long delayed introduction of the NDS designed box from existing consumer electronics manufacturers. But even after that split, DirecTV contracted with TiVo for its continually developing intellectual property, especially as it relates to advertising on DVRs.
DirecTV says its will continue to develop and offer its own portfolio of set top boxes as primary offerings to both new and existing customers with the new TiVo offered as an alternative.
It is perhaps no coincidence that TiVo has begun to look like it can survive without a symbiotic relationship with DTH or cable operators, as shown by its last quarter’s figures out lat week. With that survival pretty much assured, perhaps DirecTV would prefer to work with TiVo rather than against.
TiVo announced net income of $2.9 million for its second quarter, compared to a loss last time of $17.7 million on revenues which were down slightly to $53.5 million and although this means there is a fall in subscribers to the TiVo service, the company has better than expected hardware margin and lower than anticipated operating expenses, but has slashed its customer acquisition costs to ensure that it does not run low on cash going forwards.
Cable operator Comcast said it is pleased with the progress of its own software based TiVo service and has broadened its footprint and it intends to light up a full marketing campaign this month, with subscription acquisition costs down to $135 per customer, from $758 a year ago, by driving TiVo sales through relationships with retailers and CE manufacturers.
TiVo is still chasing EchoStar for the money after its court case, which EchoStar is still appealing. Back in June EchoStar asked a US courtroom to declare that its new DVR software no longer infringes TiVo patents.
TiVo this week also said that it is teaming up with Entertainment Weekly. to deliver and jointly market its ‘What to Watch’ TV picks directly to the television, while TiVo automatically records the recommended shows.
TiVo-Owned subscription gross additions for the second quarter were 36,000, compared to 41,000 for the year-ago period and total subscriptions are now just 3.6 million down from 4.2 million. TiVo anticipates service and technology revenues will be just $49 million to $51 million for the next quarter and it will make a net loss in the range of $7 million to $9 million.
However once TiVo completes its legal action against EchoStar, not only will it get a legal payout, it will be free to chase all the other non-paying DVR suppliers around the world, citing a won case.