Press Release
DIRECTV and TiVo to Launch New HD DIRECTV DVR with TiVo Service
Sept 03, 2008
DIRECTV, Inc. (Nasdaq: DTV), the nation's leading satellite television service provider, and TiVo Inc. (Nasdaq: TIVO), the creator of and a leader in television services for digital video recorders (DVR), announced today that they have extended their current agreement, which includes the development, marketing and distribution of a new HD DIRECTV DVR featuring the TiVo(R) service, as well as the extension of mutual intellectual property arrangements.
Under the terms of the non-exclusive arrangement, DIRECTV and TiVo will work together to develop a version of the TiVo(R) service for DIRECTV's broadband-enabled HD DVR platform. The product will support the latest TiVo and DIRECTV features and services, including TiVo's Universal Swivel Search and TiVo KidZone. TiVo will develop the new HD DVR for an expected launch in the second half of 2009.
DIRECTV will continue to develop and offer its own portfolio of industry leading set top boxes as primary offerings to both new and existing customers. This new TiVo box will be offered as an alternative choice to those DIRECTV customers who would like to add TiVo to a full line up of DIRECTV services.
"We have had a very successful history with DIRECTV. Together we brought the TiVo experience to millions of DIRECTV customers and now we look forward to launching a next generation product that uses TiVo's latest features to truly showcase DIRECTV's broad selection of high-definition programming -- all stitched together with the elegance of TiVo's renowned user experience," said Tom Rogers, TiVo's CEO and president. "This agreement demonstrates our continued embrace of mass distribution opportunities in cooperation with major multichannel operators who recognize the value of giving their customers a choice of compelling user experiences."
Like prior products developed by TiVo and DIRECTV, the new HD offering will be marketed and sold by DIRECTV nationally to its entire customer base as part of its growing portfolio of brand name video offerings. Specific consumer pricing and packaging will be announced in conjunction with DIRECTV's launch of the product.
"As the industry's content and technology leader, DIRECTV has a long-standing reputation for developing innovative, advanced products and services, including our highly successful series of DVRs and HD DVRs," said Chase Carey, president and CEO, DIRECTV, Inc. "We will continue to work with TiVo and make this new product available to all new and existing DIRECTV customers who may want to add TiVo on top of our industry leading experience."
DIRECTV and TiVo began their relationship in 2000 with the launch of the first DIRECTV DVR with TiVo service. In April 2006, the companies announced an extension of their commercial and advertising relationship and those commercial and advertising capabilities are further extended, and now include the new HD platform. DIRECTV and TiVo also recently deployed a software update to existing DIRECTV with TiVo boxes, which enables new features like DIRECTV's Remote Booking.
Financial terms of the deal were not disclosed.
Excerpted From Multichannel News
Quote:
DirecTV To Offer TiVo HD Service
DBS Operator Also Extends Intellectual Property Licensing Deal
By Todd Spangler
Three years after DirecTV stopped offering TiVo digital video recorders, the satellite operator has struck a new deal with TiVo to develop a new HD DVR as a high-end option for subscribers.
Financial terms of the deal, announced Wednesday, were not disclosed. The companies said the agreement, effective until at least February 2015, included the extension of mutual intellectual property arrangements.
Under the nonexclusive pact, DirecTV and TiVo will work together to develop a broadband-enabled HD DVR service, slated to launch in the second half of 2009. The product will support the latest TiVo and DirecTV features and services, including TiVo's Universal Swivel Search and TiVo KidZone.
DirecTV said it will continue to develop and offer its own set-top boxes as primary offerings to both new and existing customers, and that the new TiVo box will be offered as "an alternative choice" to customers.
DirecTV launched a TiVo-based DVR in 2000, but five years later said it would market its own DVR developed by NDS Group instead.
As a result, the number of DirecTV customers that still have a TiVo DVR has steadily dropped. TiVo, for the quarter ended July 31, reported a net decline in MSOs/broadcaster subscriptions during the period, dropping to 1.9 million from 2.5 million a year ago.
In April 2006, the companies announced an extension of their commercial and advertising relationship. DirecTV and TiVo also recently deployed a software update to existing DirecTV with TiVo boxes, which enables new features like remote DVR scheduling.
For TiVo, selling DVR boxes and service through cable and satellite operators is a key survival strategy. The DVR pioneer has deals with Comcast and Cox Communications, which are rolling out TiVo-based services to their customers.
The new HD DVR will be marketed and sold by DirecTV nationally to its entire customer base. Consumer pricing and packaging has yet to be announced.
The updated agreement between DirecTV and TiVo extends the expiration date from Feb. 15, 2010, to Feb. 15, 2015, with DirecTV having the right to extend further until Feb. 15, 2018, according to a TiVo 8-K filing Wednesday with the Securities and Exchange Commission.
TiVo said in the filing that DirecTV will pay "a substantially higher monthly fee" for households using the new HD DVRs with TiVo than the fees for the satellite operator's previously deployed TiVo-based DVRs. The fees paid by DirecTV are subject to monthly minimum payments that escalate during the term of the agreement starting in 2010, according to TiVo.
In addition, TiVo said, under the new agreement, each company has agreed to not assert its patents against the other party with respect to products and services deployed prior to the expiration of the agreement.
DirecTV also is entitled to "most favored customer" terms compared with other multichannel video distributors in the United States to whom TiVo grants a license to distribute certain TiVo technology in the future, according to TiVo's 8-K filing.
