TiVo reaches dealto make DVRfor Comcast

/ Source: The Associated Press

TiVo Inc., the struggling pioneer of digital video recorders, will make a customized version for Comcast cable subscribers, the two companies announced Tuesday.

The move will increase TiVo’s presence in American homes as it faces competition from generic DVRs offered directly by leading cable companies. Comcast Corp. expects to begin marketing the new DVRs, which will carry the TiVo brand, by mid- to late 2006.

“The strong TiVo brand, the clear track record of customer loyalty it has and its cutting-edge features make this a terrific partnership and exciting new product for Comcast,” Steve Burke, Comcast Cable president, said in a statement.

The deal calls for TiVo to adapt its software to work on Comcast’s existing DVR platform, and it allows TiVo to extend to Comcast subscribers the advertising it sells in the form of interactive video clips that automatically appear in the TiVo menu.

TiVo has been synonymous with digital video recording since it helped pioneered the industry five years ago. It controlled an estimated one third of the market in 2004.

But the small company faces intense comeptition from deep-pocketed cable and satellite operators, which can afford to subsidize hardware costs and already have tens of millions of customers on their rosters. Those rivals charge consumers less per month for digital recording — about $5 to $10, compared to TiVo’s $13.

Meanwhile, TiVo lost its exclusive digital recording supplier stance with satellite provider DirecTV, and it has aggressively courted the cable industry for deals similar to the one announced Tuesday.

TiVo now has more than 3 million subscribers. But in the quarter that ended Jan. 31, the Alviso, Calif.-based company posted losses of $33.7 million, wider than the $12.4 million loss in the same period a year earlier.

TiVo president Marty Yudkovitz resigned earlier this year, and chief executive Mike Ramsay said he would step down from the helm as soon as a replacement is found.

Financial terms of the multi-year, non-exclusive deal with the Philadelphia-based Comcast were not disclosed.