TiVo’s latest newsletter…
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I just mentioned this in my post on their financial results, but I feel this is big enough news to call out in its own post. TiVo is developing a new standalone box that will natively support Tru2Way, formerly known as OCAP, for advanced cable features. That means a TiVo with built-in support for SDV, VOD, PPV, and pretty much any advanced cable feature offered via Tru2Way. As Tom Rogers was quoted in TiVo’s financial statement:

In this regard, we are working in conjunction with CableLabs toward creating a standalone box that would be capable of providing the two way services provided by cable operators.

During the conference call Q&A he further elaborated that the Tru2Way-enabled TiVo standalone is seen as something TiVo can market to both consumers and cable MSOs. For consumers it would be marketed just like the TiVo HD, while for cable MSOs it would be offered as a STB for them to offer to their customers, just as they do today with Motorola or Scientific Atlanta boxes. This is similar to Digeo’s plans for the Moxi hardware, and it would offer a compliment and alternative to TiVo’s OCAP software for other hardware platforms.

The possibility of TiVo developing such a unit was first broached last November in an FCC filing relating to the Tuning Resolver:

In this proceeding, TiVo had expressed concerns about the cable industry’s OpenCable Application Platform (“OCAP”) specifications and license terms. In response to TiVo’s concerns, the cable industry has agreed to work with TiVo to make clarifications or adjustments to OCAP that may be necessary to enable TiVo to build what TiVo believes can be a viable retail DVR with OCAP. We explained that a TiVo DVR with OCAP would have a “TiVo mode” displaying all linear channels (including switched digital video enabled by OCAP) with the TiVo user interface and full DVR functionality as well as a “cable mode” running OCAP and displaying all cable programming services with the cable user interface without DVR functionality.

That was a strong indication that TiVo would be heading in this direction, but I believe today’s statements are the first to confirm that TiVo is indeed pursuing development of such a box. My bet would be on an evolution of the TiVo HD platform. This would most likely be mainly a software change, to provide the OCAP virtual machine platform, as well as the hand-off process for swapping between the TiVo platform and the OCAP platform. TiVo may be able to work off of their existing HME system, as they already have the ability to jump between ‘native’ and HME menus, etc. The major hardware change would be the addition of transceiver hardware to handle the bidirectional communication.

I do wonder if there is any possibility of these capabilities being introduced in the current Series3 and TiVo HD units. A Tuning Resolver could provide the bidirectional communication capability. If the existing hardware has the power to run the OCAP code, and I think it does, it could be a software update. But I’m not willing to bet on it, at least not until we have more details on the development effort.

Just in time for their conference call, TiVo has released their Q4 financial statement. Highlights:

- Adjusted EBITDA for the fourth quarter was $1.0 million compared to a loss of $15.0 million in the year-ago quarter, exceeding guidance
- Fiscal year 2008 Adjusted EBITDA closes in on breakeven
- Net loss for the fourth quarter was $6.4 million compared to a loss of $19.5 million in the year ago quarter
- Fiscal year 2008 net loss significantly better than prior year
- Favorable ruling in EchoStar patent infringement case; damages and injunction upheld
- Announced today Cox tech trial underway; New England to be first market
- Comcast fully launched in New England; integrated marketing has begun
- Added Omnicom Media Group to list of major advertising agency research clients
- Added CBS to list of networks and advertisers signing on to TiVo audience research

So they far exceeded the street’s estimates. The net loss per share was $.06, while the consensus estimates were for $.11. Last year the loss was $.20 per share. For the full year of fiscal 2008 TiVo had a net loss of $31.5 million, or $.32 per share, compared to $47.8 million, or $.53 per share for fiscal 2007.

Some interesting bits. They’ve begun to recognize Product Lifetime revenue on units sold prior to November 1, 2007 over a period of 54 months instead of the 48 months they’ve used until now, and on units sold since then it is now spread over 60 months, in recognition of the boxes remaining in service longer on average.

But Roger’s statements are the most interesting to me:

“In terms of our mass distribution strategy, we continue to focus on increasing subscriptions through significant partnerships with leading MSOs in the U.S. and internationally. On that front, the TiVo service on Comcast is now operational in New England, Comcast’s largest market with almost two million subscribers. Comcast is marketing the services to these subscribers and we expect marketing of the product to increase as Comcast gains greater experience with the offering.

“In addition, we are announcing today that the TiVo service on Cox is currently in tech trials and we will be launching in Cox’s New England market. With both Comcast a reality and Cox in trial, our mass distribution strategy is making significant in-roads, effectively unleashing the power of TiVo beyond the confines of a dedicated hardware consumer electronic business.

“Along these lines, cable operators are beginning to realize the benefits of providing their customers with a feature set that goes beyond the applications that they have been offering to this point. In this regard, we are working in conjunction with CableLabs toward creating a standalone box that would be capable of providing the two way services provided by cable operators. In addition, we continue to stay ahead of the curve in this area, and have progressed on our work with the National Cable Television Association to make certain that not only will TiVo HD DVR users be able to access programming channels delivered using switched digital technology, but also that the cable industry is involved in making the TiVo installation process easier for consumers.

So two announcements in there. Cox is now officially in trials and will be deploying first in New England. That’s good news. But the big news is that TiVo just confirmed that they are developing the hybrid TiVo/OCAP box with two-way capabilities, which had been rumored earlier. And he effectively reiterated the focus on the Tuning Resolver to enable SDV support on today’s CableCARD TiVos.

I think I know why they’re doing that website survey too: “We are also in the process of re-launching TiVo.com so that we can more effectively market TiVo in the most efficient way possible.” So they’re probably gathering feedback as part of the relaunch effort.

See the full release for a lot more details.

Timed to coincide with today’s earnings announcement, Fortune has apparently decided that TiVo has ‘won’ - as they’ve run an article entitled “How TiVo won“. The article has a fairly rosy outlook on TiVo’s future, hinging largely on TiVo’s courtroom victory over EchoStar, their deals with Comcast and Cox, and their statistics offerings to advertisers.

Today’s Sydney Morning Herald today ran an article which provides a potentially dire outlook for TiVo in Australia, saying the whole project could be scrapped before it even comes to market.

CHANNEL SEVEN’S planned TiVo digital video recorder service could be scrapped within weeks if free-to-air broadcasters proceed with their biggest assault yet on pay television.

The free-to-air industry is likely to launch its own FreeView-branded recorder early next year that will offer access to as many as 15 free digital TV channels and an electronic program guide.

It seems the free-to-air networks in Australia are banding together to launch a service modeled after the Freeview system in the UK. The idea is to compete with pay TV services, such as Foxtel. Part of that effort would be launching a Freeview DVR in Australia, which would compete with TiVo. As Seven’s initial plans for TiVo included having other broadcasters take a stake in the TiVo service, this could put paid to those plans and cause Seven to re-evaluate the launch of TiVo.

Current assumptions are that a Freeview STBs would start below AUS$100, while TiVo is expected to be priced between AUS$300 and AUS$500, plus a subscription fee. However, as in the US where TiVo competes with less expensive cable and satellite DVRs, TiVo would offer more features.

It is possible for TiVo and Freeview to co-exist in the market, with TiVo being a more premium product. And, as the TiVo launch had earlier been pegged for this month (though there are indications that’s slipped a bit), I’d have to expect Seven has already spent most of the money needed for development, testing, and preparing the infrastructure. So they may not have much to gain by killing the launch now - that’s money spent, and launching TiVo now gives them an edge in the market. And a DVR out before the Olympics. The Freeview effort is still in early discussions, and it seems unlikely that they’d be able to bring boxes to market before the Olympics, which are expected to drive DVR adoption.

Seven Network is refusing to comment on this issue, so we’ll just have to wait and see what develops.

It looks like TiVo is doing a feedback survey about their website. If you have opinions about their site and want to provide some feedback, this looks like your chance.

Another media company, Omnicom Media Group, has jumped on Stop||Watch:

TiVo Inc.(NASDAQ: TIVO), the creator of and a leader in advertising solutions and television services for digital video recorders (DVRs), today announced that Omnicom Media Group has purchased a subscription to TiVo’s Stop||Watch™ ratings service. The Group’s full service media companies, OMD, PHD, and Prometheus Media Services, will use the comprehensive, second-by-second DVR audience behavioral data to help their clients better understand Live and Timeshifted audience viewing habits and the effectiveness of ad campaigns.

The press release certainly not coincidentally timed to lead into TiVo’s quarterly financial conference call this afternoon. See the full release for more.

Today’s Woot is a Refurbished TiVo HD for $179.99 + $5 shipping. As with all Woot deals it is only while supplies last, and once they sell out that’s all. So if you follow the link and find something else on sale, it means they’re gone and they’ve moved on to another deal.

Thanks to user tmesser for posting a heads up in the community.