TiVo And DirecTV Reunited, And It Feels So Good

It has been rumored for a long, long time now that TiVo and DirecTV would reconcile and bring a new DirecTiVo to market. They’d been close partners until News Corp picked up a controlling share of DirecTV back in 2005. Shortly after that DirecTV switched their DVR technology provider from TiVo to NDS. NDS just happened to also be owned by News Corp. Many people felt that was the end of the DirecTiVo.

Just over a year ago TiVo and DirecTV announced that they’d be bringing additional software updates to the existing DirecTiVo units. That arrived earlier this year as 6.4a, showing that the relationship was still alive. The one cloud of doubt was in December when DirecTV acquired the remains of ReplayTV.

But then Liberty Media completed their acquisition of News Corp’s share of DirecTV in March, raising hopes. With News Corp out of the picture, NDS was no longer ‘in the family’. And Liberty Media is an investor in TiVo, giving them some incentive to have DirecTV work with TiVo again.

And today TiVo announced that a new TiVo-based HD DVR is being developed for DirecTV. Actually, from the language of the press release, I suspect it is a software load for DirecTV’s existing HR20 & HR21 HD DVRs, and not a new hardware platform.

Under the terms of the non-exclusive arrangement, DIRECTV and TiVo will work together to develop a version of the TiVo® 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.

The phrasing “a version of the TiVo service for DIRECTV’s broadband-enabled HD DVR platform” makes me think that it will be similar to the platform developed for Comcast and Cox, software that can be loaded on the existing units. Since DirecTV doesn’t have an OCAP/tru2way-style platform, it would probably be a new software load which would replace the default system software. Alternatively it could be a new box developed from the TiVo HD platform, we know the DVB-T reference box could also form the basis of a DVB-S satellite unit, and a DBS unit would be similar.

And it also seems to make more sense in context:

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.

This also sounds like Comcast, with TiVo being a premium alternative to the standard DVR. But it would be very expensive for DirecTV to maintain two hardware DVR platforms – manufacturing, maintaining inventory, support, etc. So it makes more sense for them to have one platform that they can load different environments on. It could still be a hardware platform, I just don’t think it is as likely.

In any case, the new platform will be available in the second half of 2009, and“The product will support the latest TiVo and DIRECTV features and services, including TiVo’s Universal Swivel Search and TiVo KidZone.” The release doesn’t go into detail over which features will or will not be supported, but since DirecTV has their own video on demand service I’d bet that services such as Amazon Unbox, Jaman, and CinemaNow will not be making appearances on the new DirecTV platform. Pricing will be announced with the product launch next year.

What isn’t addresses is the current DirecTiVo platform. Does the announcement of a new platform which embraces the TiVo network features mean that the existing platform’s USB ports will finally be enabled for network support? Both the hardware and the software are capable of supporting network features on par with the standalone Series2 TiVo, and the only thing preventing it to date has been DirecTV’s business decision. Since they’re clearly ready to support network features, I do hope that their existing loyal (and long suffering) customers get some support as well.

Also, in an SEC filing, TiVo revealed that their general partnership with DirecTV has been extended five more years, from February 15, 2010 until February 15, 2015, with DirecTV having the right to extend it another three years, to February 15, 2018. While the specific financial terms of the new agreement have not been revealed, the filing has this to say:

As part of this new agreement, DIRECTV will pay a substantially higher monthly fee for households using the new high definition DIRECTV DVRs with TiVo than the fees for previously deployed DIRECTV DVRs with TiVo service. DIRECTV will continue to pay the current monthly fee for all households using only the previously deployed DIRECTV DVRs with TiVo service. The fees paid by DIRECTV are subject to monthly minimum payments that escalate during the term of the agreement starting in 2010 and those minimum payments are substantially higher than in the prior agreement.

So subscribers using the new platform will be worth more to TiVo, and they have a guaranteed minimum level of revenue, which gives DirecTV some incentive to sign up subscribers fro the new platform. If they’re going to have to pay the fees anyway they may as well have clients using it. And if that isn’t enough:

DIRECTV is also obligated to annual marketing commitments, including significant cross-channel promotion of the high definition DIRECTV DVR with TiVo service to be developed by TiVo.

It sounds like a good deal for TiVo and DirecTV both. They also agreed to extend their covenant not to assert their patent rights against each other. Which could be why DirecTV picked up ReplayTV, as I speculated at the time. Holding ReplayTV’s DVR patents gives DirecTV a stronger hand when dealing with TiVo and their patents. The agreement extension also covers TiVo’s ability to sell advertising and perform audience measurement activities on DirecTV’s DVRs with TiVo service.

Today is a good day for fans of TiVo and DirecTV – but it will be an even better day when it ships next year.

About MegaZone

MegaZone is the Editor of Gizmo Lovers and the chief contributor. He's been online since 1989 and active in several generations of 'social media' - mailing lists, USENet groups, web forums, and since 2003, blogging.    MegaZone has a presence on several social platforms: Google+ / Facebook / Twitter / LinkedIn / LiveJournal / Web.    You can also follow Gizmo Lovers on other sites: Blog / Google+ / Facebook / Twitter.
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  • Swingpwayer

    Tivo + Satellite + HD + Home Media Option —-
    if it happens, it will be “bye, bye Dishnetwork”–”HELLO DIRECTV!”