I’m not really a big fan of PayPal myself, I only use it when I have to, but there is no denying they’re the 800 pound gorilla in the online payments arena. PayPal is a name known and trusted by most consumers, a strong brand accepted by a multitude of merchants. Like them or not, there really isn’t a better payments processor for TiVo to partner with. Someone like Amazon Payments or Google Wallet just wouldn’t give them the scope of PayPal. And there certainly seems to be a lot of potential, given the data shared by PayPal:

According to a survey conducted by PayPal in October 2011, half of TV subscribers (49%) show an interest in purchasing goods and services linked to the content they’re watching on TV, either directly from their television through their remote control, or on a companion device (smartphone or tablet). In addition, nearly 30% of those same TV subscribers said they would use PayPal to make those purchases. In fact, 89% of respondents knew about PayPal as an online payment service with 61% of them having used it in the last 12 months. Furthermore, according to research done by Nielsen, consumers who watch traditional television are engaged approximately 5.1 hours a day, whereas consumers who surf the Internet are engaged less than an hour a day.

TiVo and their agency partners will be working to bring PayPal-enabled ads to consumers in time for the fall 2012 TV season. It sounds like purchasing capabilities will be available to advertisers across TiVo’s ad placement offerings – Interactive Tags, Showcases, etc. I think that’s a good first step, but I think the real potential is integration with shopping channels. As well as the possibility of enhanced TV. How about watching a cooking show and being able to call up an onscreen display to order the host’s cookbook or their branded products? Or watching a fashion-based program and being able to order the clothing seen on the show? It’ll also be interesting to see if the payment system is part of the new SDK TiVo is preparing, to allow purchases via third party apps.

PayPal is also looking to expand this beyond TiVo, as they stated in their blog they’re also working with Comcast:

We’re excited to announce that we’re collaborating with industry leader Comcast Cable to explore opportunities that include enabling consumers to make purchases or donations related to the content they’re watching on television either directly through their TV using the remote control, or on a companion device such as a smartphone or tablet. We are also exploring opportunities for enabling consumers to accept coupons directly into their PayPal online wallet during television advertisements.

Though it sounds like their plans with Comcast are much less concrete than what was announced with TiVo today.

There is one thing about this announcement I could really do without – the term ‘t-commerce’. Yes, a ‘clever’ play on e-commerce and TV. Oh well, marketing, what can you do?

The press release is below:

TIVO TO INTEGRATE PAYPAL ENABLING SIMPLE SHOPPING ON TV AND STRENGTHENING ITS INTERACTIVE ADVERTISING SOLUTION

Will allow users to easily purchase featured products through a few clicks of the remote control improving advertisers’ ability to reach consumers in today’s fragmented TV viewing world

SAN FRANCISCO, CA – June 12, 2012 — TiVo Inc.(NASDAQ: TIVO), a leader in advanced television services and advertising solutions, and PayPal announced they have teamed up to provide TiVo users with the ability to purchase products featured in interactive advertisements on the TiVo user interface through PayPal, the faster, safer way to pay. This integration creates a new opportunity for advertisers and brands to connect with TiVo users and to turn their 30-second spots andinteractive TiVo ad placements into actionable purchasing opportunities through a one-time account link.

“In today’s fragmented TV viewing world it is harder than ever before for advertisers to reach their audiences, and it’s important to find creative ways to get in front of viewers,” said Tara Maitra Senior Vice President, General Manager, Content and Media Sales, TiVo Inc. “TiVo’s interactive ads allow advertisers to grab the attention of viewers in unobtrusive ways and on the viewer’s terms. By teaming with PayPal consumers will be able to instantly purchase products with just a few clicks of the remote after an easy, one-time account setup. PayPal’s expertise in online payments, customer service, and working directly with merchants and sellers makes the entire payment process easy and trustworthy and will create a valuable experience for TiVo users and advertisers.”

Scott Dunlap, Vice President of Emerging Opportunities and New Ventures for PayPal said, “At PayPal we have been redefining commerce from online to mobile to offline and we see television as the newest channel in commerce. Teaming up with TiVo will help us connect merchants and consumers via the TV set in the fastest and safest way possible. We are excited about the prospect of delivering a more complete and seamless couch commerce experience.”
TiVo’s other interactive advertising solutions are currently being used by various leading brands in a host of industries as they allow advertisers to target consumers in a time-shifted world without unwelcomed interruption and offer them the option of exploring products that interest them.

TiVo will be working with its advertisers and agency partners to develop PayPal-enabled TiVo ads and Showcase campaigns beginning with the fall 2012 television season. This solution will also be available to TiVo’s MSO customers such as RCN, Suddenlink and more. Products purchased through PayPal will be charged to the TiVo user’s PayPal account through a secure transaction and shipped to the address the user has registered with PayPal for deliveries. Orders will be fulfilled either by the advertiser or a trusted merchant that accepts PayPal for payment.

TiVo and PayPal unveiled news of this new offering during the TV of Tomorrow Show 2012 in San Francisco. To learn more about TiVo’s interactive ad opportunities visit www.tivo.com/advertising. For more information about PayPal and t-commerce visit the PayPal Blog.

Conference Details:
Twenty-Eighth Annual Sanford C. Bernstein & Co. Strategic Decisions Conference 2012
New York, NY
Thursday, May 31, 2012
3:00 PM ET
Tom Rogers, President and CEO

As they say, a picture is worth 1,000 words, and this one answers some of the questions I had, and that I heard from readers. Note that the photo is from a box running development software, so the screen and/or language therein may change before release, etc. But the underlying logic is what we should expect in the initial release. As you can see, you do not have to give up a tuner on your Premiere XL4 to use the IP STB – if you’re willing to forego Live TV, as I am. Basically you’re reserving one or two tuners in the XL4 for use by IP STB(s) elsewhere in the home. When a tuner is reserved it is not available for anything else. It is not used for recordings, it is only used for Live TV on the IP STB. Period.

Now, one question that occurred to me after I’d left the show today was if a tuner is paired with a single IP STB, or if it can be shared. Say you have one XL4 and three IP STBs – can you reserve just one tuner which would allow any one of the three IP STBs to use Live TV at a time? I’ll need to ask that.

But, that aside, you can see that you have the option to reserve 0, 1, or 2 tuners for use by IP STBs. Personally I’d go with 0 as I never use Live TV and would only want the IP STB to access my recordings or OTT content. I think this will make a number of people happy. Also, this is a settings screen on the XL4 and you can change this whenever you want. So it isn’t something you have to do at setup, etc. So if you know you want to watch Live TV in another room (the game is on, you’re sick in bed, whatever) you can reserve a tuner and then un-reserve it when you no longer need it.

Speaking of setup, there apparently really isn’t much of one on the IP STB. Setup basically involves ‘pairing’ it with the XL4 – and that’s it. There’s nothing else to setup, it pulls all of the settings it needs from the XL4. I’m told there are very few settings local to the IP STB.

I did confirm that the will not pair with the Premiere or Premiere XL at launch, only the Premiere XL4 (aka the Premiere Q for MSOs). So no Live TV on your IP STB if that’s all you have. And this isn’t a ‘soft’ thing where it isn’t officially supported but you can make it work, the software is just not there to support it on those units. However, the IP STB is a standard Multi-Room Streaming (MRS) client. It can stream content of of any Premiere unit in the home. So it does work with the Premiere and Premiere XL in as far as you’ll be able to stream your recordings via MRS. My understanding is that you will not be able to set recordings on the Premiere or Premiere XL, etc., as that requires the pairing that can only be done with the XL4. Basically whatever you can do with MRS between Premieres today you can do from the IP STB, but that’s all – for now at least. (I’m going to double check to make sure that’s accurate.)

As for pricing – again, they haven’t said yet. We don’t know if they’ll be a one-time purchase, or if there will be a subscription required, etc. Personally I expect them both to be one-time purchases with no subscription requirement. But they will need to be activated on the TiVo account so that they get the same MAK and can connect to the TiVo DVR units on the network.

I did have an idea which I suggested to TiVo – parental lock down on the IP STB. Basically ‘KidZone’ on a per-box basis. My idea is that you could put an IP STB in the kids’ room and lock it down so it can only access a wall garden of recordings and channels, just like KidZone did. You’d be able to (dis)allow functions – so the kids couldn’t delete recordings, or cancel them, or setup new recordings, etc. Whatever power you want to give them. Basically they’d have their own Nerfed virtual TiVo.

Enough about the IP STB, how about the TiVo Stream? The Stream will transcode at native resolution. So the 1080i recording remains 1080i as H.264, and the 720p recording remains 720p as H.264, etc. So it isn’t fixed, or limited to 720p, etc. And side-loading happens at better than real time. I was told ’2x’ is a good rule of thumb – so a 30 minute recording will side-load in 15 minutes, etc. But this varies depending on the bit rate of the source material. A 19mbps minimally compressed HD ATSC stream will probably take closer to real time, while a 2mbps highly compressed SD digital cable recording will likely side-load very quickly. In other words, results will vary, but it isn’t stuck with only doing real-time transcodes for side-loading.

Right now the TiVo Stream will only stream content from a TiVo DVR to one of the TiVo client apps on iOS or Android. TiVo hasn’t announced anything for other platforms at this time. I don’t know if we might see an updated version of TiVo Desktop that would support streaming to a PC, though it may make more sense to just add MRS to TiVo Desktop to allow it to stream content to a TiVo as well as from one. And PCs can handle MPEG-2, so I don’t see the need for a TiVo Stream for that.

Hopefully this news makes a few folks happy.

Lastly, this won’t be news to regular readers of this blog, but the Stream is powered by a Zenverge ZN200 chip. I speculated to that effect last year, and TiVo confirmed it for me in February, but today it was officially announced via press release. The release is below:

Zenverge Showcases TransAll™ technology with TiVo’s new TiVo Stream

TiVo Stream to extend TV viewing to mobile devices with the world’s first deployment of multi-screen streaming from a DVR

BOSTON, May 22, 2012 /PRNewswire/ — Zenverge Inc., a leading developer of Advanced Content Networking ICs, and TiVo Inc. (NASDAQ: TIVO), the creator of and a leader in advanced television services including digital video recorders (DVRs), announced TiVo® Stream, a revolutionary product enabling streaming to tablets and smartphones with the same rich TV viewing experience TiVo customers know and love.

Based on the industry leading Zenverge TransAll™ Transcode engine, TiVo Stream will allow a viewer to seamlessly stream or download multiple live or recorded shows from a TiVo Premiere DVR to multiple devices like iPads or iPhones simultaneously. Its unique fast side-load capability is a critical element of a true on-demand experience and allows users to quickly download favorite shows to their tablets for later viewing.

This product takes advantage of the Zenverge TransFormat™, TransRate™, and TransScale™ functions to convert broadcast content into the format supported by tablets and smartphones. TransZip&treade; allows side-loading DVR content at a high speed into mobile devices for sync-n-go. Lastly, TransCrypt&treade; ensures that live and DVR content can be securely distributed in the home.

“Cable MSOs are keen to extend the whole home experience beyond the TV to include mobile devices,” said TiVo’s David Sandford, Vice President and General Manager, Service Provider Business. “Using the unprecedented quad HD transcoding capabilities of the Zenverge ZN200, we are bringing the unique TiVo experience that consumers love to the mobile screens.”

“We’re excited to work with TiVo on extending their premium TV viewing experience to second screens as they pioneer yet another blockbuster entertainment product following their success with the DVR,” said Zenverge’s Raghu Rao, Executive Vice President of Sales and Business Development. “TiVo Stream will enable service providers using TiVo’s innovative advanced TV solutions to create a compelling anywhere, anytime, any device experience for their customers.”

Zenverge’s Advanced Content Networking ICs are the preferred transcoding solution for operators and box manufacturers for devices such as Gateways, DVRs, and IP/Broadcast streaming adapters.

The Pace XG1 isn’t considered a DVR, but a “Multi-Tuner Video Gateway”. It is really part of a new type of solution, in the same category as Arris’s Moxi Gateway. It is meant as a content ‘gateway’ into the home, feeding client boxes which actually handle the content display. The XG1 has six digital cable tuners as well as a built-in DOCSIS 3.0 modem for data connectivity and IP content delivery, and MoCA for home networking.

Running TiVo’s software it will support TiVo’s whole-home solution, streaming content to traditional STBs as well as IP clients. It is also compatible with TiVo’s phone & tablet apps. It will be available to US operators later this year.

I didn’t make it to Pace’s booth Monday. I’ll try to get there on Tuesday to see what additional info is available.

The Press Release is below:

TIVO AND PACE ANNOUNCE FIRST PACE PRODUCT WITH TIVO SOFTWARE INTEGRATION

Pace XG1 Multi-tuner Video Gateway to offer 6 video tuners, integrated DOCSIS 3.0 and support for TiVo Whole Home Solution

BOSTON, MA – May 21, 2012 – TiVo Inc. (NASDAQ: TIVO), the creator of and a leader in advanced television services, including digital video recorders (DVRs), for consumers, content distributors and consumer electronics manufacturers, and Pace (LSE: PIC), a leading developer of technologies, products and services for global broadband and broadcast markets , today announced details of the first product, the Pace XG1, resulting from a global partnership TiVo and Pace announced in February 2012 to develop flexible, advanced television solutions for operators. This new Multi-tuner Video Gateway from Pace will provide cable operators in the Americas an advanced television solution for their customers by bringing to market the full award-winning TiVo experience on powerful, new platforms designed to be easily integrated with today’s cable networks.

The Pace XG1 includes 6 video tuners, an integrated DOCSIS 3.0 modem, and at least 500GB of on board hard drive storage. It will utilize TiVo’s whole-home capabilities, such as multi-room streaming and support for both traditional set-top boxes and IP devices as clients over MoCA, and support for TiVo’s mobile and tablet applications.

David Sandford, Vice President and General Manager of TiVo’s Service Provider Business said, “This partnership will make the TiVo experience easily accessible to more cable operators than ever before. It will provide operators a best-in-class advanced television solution that they can quickly and cost-effectively deploy and will serve as the gateway to a rapidly expanding choice of content across multiple screens through TiVo’s whole-home solutions.”

Tim O’Loughlin, President of Pace Americas, stated, “There is no denying that the current climate for operators is immensely competitive, and we have been hearing more and more frequently from this community that TiVo is a user experience that they want to offer. We are excited this partnership has yielded a product that will harness the very best of traditional television and broadband delivered content into a seamless, enjoyable package across multiple Pace platforms and customer owned devices.”

As previously announced, this initial offering will first be made available by Pace to cable operators in the Americas later this year. TiVo and Pace also expect to follow the XG1 with additional solutions for domestic and international operators soon after.

U.S. operators currently deploying TiVo offerings to their customers include Charter, DIRECTV, RCN, Suddenlink and Grande Communications, and European operators include Virgin Media, the largest cable operator in the UK, and ONO, the largest cable operator in Spain.

TiVo and Pace unveiled details about the Pace XG1 at the 2012 NCTA Cable Show in Boston. For more information visit the TiVo booth #1859 and Pace booth #1653 located in the main exhibit hall.

The ‘transcoding box’ is now officially the TiVo Stream, and it will be available to both retail customers and TiVo’s cable MSO partners later this year. The render to the left is the retail version of the box, while the one to the right is the MSO version. They’re pretty much the same except for coloring, and obviously the final labeling will change.

The TiVo Stream will work with the TiVo Premiere, Premiere XL, and Premiere XL4 (formerly known as the Premiere Elite, and known as the Premiere Q for MSOs). It is a very simple device with only two connections – power and Ethernet. The photos below were taken at the show, you can see the simple design and limited connectors.

The TiVo Stream acts like a Multi-Room Streaming (MRS) client on the network, just like another Premiere would. While the hardware is cable of transcoding four streams, it is limited to two per Premiere due to transport throughput limits on the Premiere end. So to use all four transcoding stream simultaneously you would need at least two Premieres on the network. As previously reported, the MPEG-2 streams are transcoded to H.264 for delivery to ‘second screen’ devices within the home.

The Stream supports real-time streaming as well as side-loading of content onto a mobile device for later viewing away from the network. However, copy protection does apply. It is basically Multi-Room Streaming (MRS) vs. Multi-Room Viewing (MRV). If you can stream a problem between Premieres, you’ll be able to streaming it to a second screen. And if you can copy programs between TiVos, or to a PC via TiVoToGo, you’ll be able to side-load it. But if a program is blocked from TiVoToGo it will also be blocked from side-loading. TiVo doesn’t make the rules, they just follow them. So it really depends on how draconian your MSO is.

The Stream can access ‘Live TV’ – kind of. Since it acts just like any other MRS client, and MRS only streams recordings, what happens is it triggers the Premiere to start recording the content. The Stream then accesses that recording in progress and streams it. So in the end there is a recording on the Premiere of the show you streamed ‘live’.

And, as I’ve said previously, right now the intention is to support clients within the home. So place shifting content onto your phone or tablet in another room, but not across the Internet to another location. So this will not be a Slingbox replacement, at least to start. TiVo acknowledges the interest and it is something that might come via a software update. They have looked into it, and interestingly they’ve even talked to Sling Media about remote streaming (possible now that TiVo and EchoStar have kissed and made up), but there is nothing firm at this time.

Jim Denney and I talked a bit about future plans and the transcoding eventually being ‘baked in’, and it is all but certain to happen. It is all a trade off, and right now we’re not quite at the tipping point. SoCs with transcoding baked-in are appearing but are still higher costs parts and there have been performance tradeoffs. We talked about the Broadcom BCM7425, which has dual transcode support, and TiVo has looked at the chip. And there is a newer BCM7435, which just started sampling, which has quad transcode support and a general bump in capabilities, including 8 QAM tuners. (Humax has a demo box at the show using this chip, but they don’t expect it to be available to MSOs until 1Q13.) So TiVo is looking ahead and it is all but a given that this will be baked into a future product, but I wouldn’t expect that until 2013 at the earliest.

The other new set top box is the IP STB – which doesn’t have a snappy name yet, sorry. This is the baby brother to the TiVo Preview and at launch it will only work with the TiVo Premiere XL4/Q – not the TiVo Premiere or Premiere XL. STOP! Before you freak out, there is a reason, and this should change with a future update. Calm? OK. The IP STB does not have a tuner of its own, it uses a tuner from the XL4 for Live TV. In the initial release this requires dedicating a tuner in the XL4 to the IP STB. Yes, that means the tuner is not available for recordings, etc. This is done during setup, you pair the IP STB with a single Premiere XL4 and select one tuner to dedicate.

TiVo knows this is not optimal, but it is a matter of releasing something that is ‘good enough’ for market and then improving it. The plan is to have dynamic tuner allocation in a future release, whereby the IP STB would grab a free tuner for Live TV. But it is a sticky development problem to solve, so for the first release they basically avoided it by going with the dedicated tuner. It is sticky because there are a number of use cases. How can the unit reliably schedule recordings when one (or more if you have multiple IP STBs) can grab a tuner? How do you handle it if all four tuners are in use and someone wants to access Live TV on an IP STB? Etc. I’m sure lots of people have answers, but I’m also sure a lot of those answers will conflict. So TiVo needs time to work on the issue, do their usability testing, and create a good solution.

This need to dedicate a tuner is also why the Premiere and Premiere XL are not supported in the first release. They’d be reduced to single-tuner units. With the XL4 sacrificing a tuner, or even two, isn’t as big a deal. Again, this is temporary and TiVo plans to resolve this in a future update. (And just don’t even start with the “Oh, so when will that be?”, OK?)

I did ask Jim if it might be possible to pair it with an XL4 and *not* assign a tuner at all, which would mean no Live TV on the IP STB. Some users, like myself, never watch Live TV and wouldn’t miss it. I’d rather leave all four tuners free to record and use the IP STB only for watching recordings and accessing OTT content. He didn’t know if that was possible, and he’ll look into it. I think that’d be a nice setup option.

As for the hardware itself, it is a small, square, trapezoidal unit in the same league as the Apple TV or a Roku box. It supports all of the standard TiVo Peanut remotes, including the TiVo Slide remote. I didn’t get the specific model number of the chip inside, but Jim said it is roughly equal in performance to the SoC in the Premiere XL4, and that performance on the IP STB can be even higher because it doesn’t have all of the other work to do with recording, etc.

The back of the box is where you’ll find all of the connectors – coax, a component break-out port, a composite A/V break-out port, HDMI, Ethernet, USB, and power. Component and composite A/V connections are accomplished via break-out cables, similar to some of the Roku models. The coax connection is not for a tuner, it is for MoCA and only MoCA. At this time the USB port is only for the Bluetooth dongle used by the TiVo Slide remote. It will not support the old TiVo 802.11g WiFi adapter as TiVo is actively discouraging the use of WiFi due to the high bandwidth demands of the box. Though there is nothing stopping you from using an external 802.11n, or even a new 802.11ac, bridge.

I did ask if the box could be used as a MoCA bridge, like the XL4, and it cannot. So you can’t use an XL4 and an IP STB to bridge Ethernet over MoCA for another room. I was thinking that if it could act as a bridge you could connect Ethernet to the XL4, use MoCA to feed an IP STB in the bedroom, and then connect other devices, like a Blu-ray player, to the Ethernet on the IP STB. But no such luck, sorry. You’d need another ECB (Ethernet to Coax Bridge).

It is the same UI you know and (probably) love from the TiVo DVR. When you access Live TV it uses the dedicated tuner on the XL4. Recordings are streamed as-is from the XL4 to the box, so they’ll be the same MPEG-2 content. Full quality, there is no transcoding. All OTT IP content, such as Netflix, Hulu Plus, and YouTube, stream directly to the box over the network without touching the XL4. Cable MSO VOD, where supported, would require a tuner on the XL4, as it is delivered today via QAM and not IP.

Now, you probably want to know pricing and availability, right? Yeah, sorry. No pricing details as of yet. And the timeline is ‘in the coming months’. It looks like fall, maybe late summer if we’re lucky.

I think that’s it on these two boxes. I have more photos, if you want to see them check out my Picasa gallery from the show. I’ll be adding more photos as I take them the next couple of days as well.

If there is anything else you want to know, just ask. I may have forgotten to share something, and the show has two more days so I can go back to ask more questions.

EDIT: I did go back, and I did ask more questions, and I’ve posted the new info.

The Press Release is below:

TIVO EXPANDS WHOLE-HOME AND MULTI-SCREEN OFFERINGS

TiVo introduces a low-cost IP set-top box to extend the full TiVo experience to additional televisions in the home

TiVo adds a low-cost transcoding accessory – TiVo Stream – enabling operators to provide streaming of linear content to tablets and mobile devices

BOSTON, MA – May 21, 2012 — TiVo Inc. (NASDAQ: TIVO), the creator of and a leader in advanced television services, including digital video recorders (DVRs), for consumers, content distributors and consumer electronics manufacturers, today announced two major enhancements to its whole-home viewing solution. Its IP set-top box, delivers the TiVo experience on secondary televisions throughout the home. TiVo Stream, provides transcoding to enable content viewing on mobile devices.

Through these new products, operators working with TiVo can give their subscribers the content they want on any screen within the home, including secondary televisions, tablets and smart phones and all through the same easy-to-use TiVo interface. For example, the IP set-top box compliments the home’s primary TiVo DVR by extending the TiVo experience onto secondary TVs including live and recorded television viewing. TiVo Stream delivers content to a customer’s tablet or mobile device, creating a cohesive viewing experience no matter how they choose to watch their programs. Both products are optimized for operator distribution, including automated provisioning and activation, and the low-capital costs that operators demand.

Tom Rogers, President and CEO, TiVo Inc. said, “Consumers not only want an enjoyable TV experience, but now demand choice and the flexibility to watch content on multiple devices and screens within the home. TiVo has worked with our operator customers to create a suite of affordable companion devices that deliver a cohesive experience regardless of the screen the customer wants to use.”

The IP set-top box works with the TiVo Premiere Q, a home’s primary gateway device, to give consumers access to live and recorded TV, operator VOD, plus broadband-delivered content on every TV in the house. This is delivered through the innovative TiVo experience consumers have come to know and love. It includes integrated MoCA to simplify home networking and multi-room applications.

TiVo Stream seamlessly delivers the content available on a consumer’s TiVo Premiere or Premiere Q DVR to alternative screens such as iPads and iPhones. Unlike similar offerings in the market, this is the first product to enable streaming or download of shows simultaneously to multiple portable devices without interrupting what’s playing on the television. The power of TiVo Stream enables users to quickly transfer shows to their mobile device for viewing outside the home.

TiVo will release both products at retail and through select cable operators. Additional details on availability for both the IP set-top box and TiVo Stream will be announced in the coming months.

TiVo unveiled details about both products during the 2012 NCTA Cable Show in Boston. For more information visit the TiVo booth #1859 located in the main exhibit hall.

The new Premiere family lineup will be:

• TiVo Premiere – 500GB/75 Hours HD, 2 tuners, analog cable, digital cable, FiOS, antenna – $149.99
• TiVo Premiere XL – 1TB/150 Hours HD, 2 tuners, analog cable, digital cable, FiOS, antenna – $249.99
• TiVo Premiere Elite – 2TB/300 Hours HD, 4 tuners, digital cable, FiOS – $399.99

As further good news, TiVo is reducing their monthly subscription pricing from $19.99 on the first unit and $14.99 on each additional unit under the Multi-Service Discount, to $14.99 for the first unit and $12.99 for each additional unit. Product lifetime service remains at $499.99 for the first until and $399.99 for each additional unit. (Note that this pricing only applies to the Premiere family, older models remain at the $12.95/$9.95 pricing level. This reflects the different pricing model and subsidized on the older units when they were sold.)

So the Premiere gets a 180GB capacity bump and a $50 MSRP bump, the Premiere XL drops by $50, the Premiere Elite drops by $100, and monthly service pricing drops by $5 on the first box and $2 on each additional unit. Not a bad change I’d say.

I’ve said it before and I’ll say it again – do not go monthly, buy product lifetime service. Yes, it is more up front. But you break even in 33 months with the new pricing on the first box ($499.99 vs. $14.99/month), and 31 months on additional units ($399.99 vs. $12.99/month). Odds are you’re going to be using the unit for longer than that. TiVo expects units to remain in service at least 60 months; that’s the period they amortize lifetime service revenue over. Once you break even you’re effectively saving money every month you use the box.

But there’s more – it is like buying vs. renting. If you go monthly, when you stop paying the box becomes a doorstop. And a used TiVo without any subscription has very little residual value on the resale market because of the relatively low pricing on new units – and factory refurbished units which have a full warranty unlike a used box from a user. But units with product lifetime service have a high residual value because PLS transfers with the unit. So you can resell the box on eBay, Craigslist, etc., and recoup a good bit of your initial investment. You won’t get that with monthly service – those payments add nothing to the value of the unit. So you save even more in the long run if you decide to resell the box.

Of course, you can always just give it away to someone else – a friend, the kids, etc. – or put it in another room in your home when you decide to upgrade to the latest and greatest. Since it has lifetime service it will continue to do its thing with no additional cost. And if you’re worried about it failing, which will happen to everything eventually, most failures are the hard drive or the fan – the only two moving parts. And both of those are readily replaced with very little technical knowledge required. If you can operate a screwdriver you can replace either one. Even a unit with a failed hard drive will carry value if it has PLS as people buy them just to fix them and put them back into service.

I’ve owned six TiVo units and I’ve had PLS on all of them. I’ve resold four of those over the years and recouped a fair bit. It works out especially well when PLS pricing increases between the time you purchase it and when you resell it. But enough of this – you get the point.

The full press release from TiVo is below:

ALVISO, Calif. (March 25, 2012) – TiVo Inc., the creator of and a leader in advanced television services including digital video recorders (DVRs), announced the launch of its new entry-level TiVo Premiere DVR which records up to 75 hours of HD content giving customers 65% more recording space than its previous version. Beginning Sunday, March 25, the upgraded memory version of TiVo Premiere is available for purchase on tivo.com or from your local Best Buy store.

With the introduction of this expanded model, TiVo has updated its pricing structure across all TiVo products giving customers easier access to even higher recording capabilities. The TiVo Premiere product line is the following:

• TiVo Premiere $149.99: Records two shows at once and up to 75 hours of HD content
• TiVo Premiere XL $249.99 (reduced $50): Records two shows at once and up to 150 hours of HD content
• TiVo Premiere Elite $399.99 (reduced $100): Records four shows at once and up to 300 hours of HD content

“We now live in a world where HD entertainment is the standard and there is more demand than ever to provide customers with additional recording space,” said Doug Bieter, Vice President of Retail Sales for TiVo, Inc. “By enhancing the TiVo Premiere, we’ve also responded to customers’ requests for upgraded memory and introduced a new TiVo monthly service fee structure that is highly competitive with most cable DVR pricing. It is now easier than ever to get the greatest at-home entertainment experience available on the market today.”

TiVo has introduced new monthly pricing for all TiVo Premiere DVRs:

• The TiVo monthly service fee is now $14.99 per month, with a one-year commitment, making it lower on a monthly basis than most cable offerings
• Multi-service discount pricing is now $12.99 per month

For customers wanting to pay once for the lifetime of the DVR, product lifetime service is still available for $499.99 and at a discounted price of $399.99 for customers with multiple TiVo DVRs.

TiVo’s award-winning user interface offers a unique combination of TV, web and on demand content, paired with top-of-the-line recording capabilities and the many great features users have grown to love. With TiVo Premiere, Premiere XL, and Premiere Elite, users have access to the world’s largest on demand library from services like Netflix, Hulu Plus, Amazon Instant Video, YouTube, Pandora and more.

The 500 GB TiVo Premiere TiVo can be purchased nationwide at retail stores like Best Buy or directly from TiVo by calling 1-877-BUY-TIVO (1-877-289-8486) or visiting www.tivo.com.

# # #

* There will be no pricing change for non-Premiere legacy boxes; monthly service now costs $12.95/month ($9.95/month for multi-service discount pricing). Product Lifetime Service remains the same: $499.99 – $399.99 multi-service discount pricing for additional units.

About TiVo Inc.
Founded in 1997, TiVo Inc. (Nasdaq: TIVO – News) developed the first commercially available digital video recorder (DVR). TiVo offers the TiVo service and TiVo DVRs directly to consumers online at www.tivo.com and through third-party retailers. TiVo also distributes its technology and services through solutions tailored for cable, satellite and broadcasting companies. Since its founding, TiVo has evolved into the ultimate single solution media center by combining its patented DVR technologies and universal cable box capabilities with the ability to aggregate, search, and deliver millions of pieces of broadband, cable, and broadcast content directly to the television. An economical, one-stop-shop for in-home entertainment, TiVo’s intuitive functionality and ease of use puts viewers in control by enabling them to effortlessly navigate the best digital entertainment content available through one box, with one remote, and one user interface, delivering the most dynamic user experience on the market today. TiVo also continues to weave itself into the fabric of the media industry by providing interactive advertising solutions and audience research and measurement ratings services to the television industry www.tivo.com
TiVo, TiVo Logo, and Trick Play are trademarks or registered trademarks of TiVo Inc. or its subsidiaries worldwide. ©2011 TiVo Inc. All rights reserved. All other trademarks are the property of their respective owners.

In January, during CES, they put out a press release about OTT content and recorded TV overtaking Live TV viewing. They reported that, on web-connected units, live viewing was only 38%. And among users who use OTT services like Netflix, Hulu Plus, and Amazon Instant Video it is only 27%. The source for this data? Stop||Watch. That’s a bit of indirect marketing – “Look at what we can do with this data. Imagine what you could do with it.”

Last month they made a direct pitch when they announced the launch of ‘Next Day’ data services in Stop||Watch. Of course, they used the Academy Awards as a ‘hook’ for the announcement, as they released it the next morning and included viewing data from the previous night’s broadcast. Which is a clever marketing move as the popular press doesn’t care about the next day data service, but it got a lot of press because of the Academy Award data that was included.

Last month also saw the announcement of the deal with AT&T AdWorks to incorporate their data into Stop||Watch. Last week we had CEO Tom Rogers’ letter to the editor in The New York Times. And while he never mentioned Stop||Watch by name, it was obviously a stealth pitch for the service.

But that’s not all, over the past few weeks TiVo bloggers at MediaBizBloggers.com have really been beating the drum. MediaBizBloggers’ target audience is made up of industry members, not the general public, so the posts are tailored accordingly. Back on March 5, Jonathan Steuer, TiVo’s Vice President, Audience Research & Measurement, blogged in response to the same NYTimes article on the Modern Family ratings that Tom Rogers’ letter was in response to. It basically says the same thing Rogers said, only in much more detail with the data and graphs to back it up. All of it pulled from Stop||Watch, of course.

Then on Monday Greg DePalma, TiVo’s Vice President of Audience Insights, blogged about marketing executives basing their ad buys on gut feeling and historic behavior patterns instead of hard data. He never mentions Stop||Watch by name, but he does call out“TiVo and other STB data” in making the argument that buying based on the data produces better results for advertisers.

On Wednesday Alex Petrilli, senior manager of audience research at TiVo, blogged a very tongue in cheek post entitled“All I Really Need to Know I Learned from Nielsen“. The whole post is a little bit snarky in a fun way, relating stories about lessons he’s learned via the examples set by others. As in, what not to do so you don’t end up like them after they screw the pooch, as it were.

For example, he snarkily points out how ridiculous Nielsen’s rating system is, in areas such as sample size:

I discovered that 1,200 diaries can accurately represent the viewing of almost seven million people in the San Francisco DMA. Nielsen taught me that 500 household meters will equate to the two million plus households for the same DMA. And when people meters arrived, 800 was the magic number to capture both household and demographic viewership. As far as Nielsen’s NTI sample goes, 21,000 will be sufficient to represent the 114 million U.S. households thank you very much.

He later goes on to, of course, extol the virtues of Stop||Watch:

Thanks Nielsen, lessons learned. Here at TiVo our anonymous daily Stop||Watch sample consists of 350,000 set-top boxes. We also recently signed a licensing deal to incorporate the more than 8 million AT&T U-verse set-top boxes into our system which will significantly increase our sample size. In terms of DVR playback, based on TiVo’s 4th Quarter Stop||Watch data, 44% of all programs viewed were time-shifted. 54.6% on broadcast television and 37.8% on cable. In prime those figures jump to 63.4% for broadcast and 46.5% for cable equating to 56.1% overall. Based on other information I have seen regarding DVR usage, these figures appear more realistic than Nielsen’s 16.7%. But in the end, it is all about sample size, and Nielsen will be the first to tell you they have it covered.

It is nice to see a non-dry tone from a corporate blogger, honestly.

I know there have been other direct and indirect Stop||Watch pitches I’ve encountered, but I think these will suffice. Maybe it is just my unusual travels on the net; I do cover TiVo as a blogger (obviously), so I have various agents scouring the net for TiVo news and I monitor many different sources of TiVo info. But it definitely feels like activity surrounding Stop||Watch has picked up as of late.

End users may wonder what this means for them and really – not much. But services like Stop||Watch are part of TiVo’s diversified business model and success in selling these services is good for TiVo’s overall health. In the longer run, data-based advertising can lead to more meaningful ads. And evidence of problems reaching audiences who time shift can steer advertisers toward TiVo’s related offerings in interactive advertising and on-box promotions.

Lately it feels like TiVo is making a more concerted effort to raise awareness of Stop||Watch among industry decision makers. It has the feeling of an organized marketing push. It is nice to see TiVo being more aggressive in marketing these services. Of course, maybe it is just my skewed perspective.

In addition to the ARRIS Whole Home Solution, Buckeye is deploying the next generation ConvergeMedia video on demand (VOD) platform, and ServAssure Advanced network monitoring solution. So they’re bringing ARRIS in throughout their organization. That’s an area ARRIS has an advantage over TiVo. They can offer an end-to-end solution for small MSOs from a single vendor. This is the kind of small operator that TiVo pursues via their partnership with Evolution Digital and Clearleap. But a multi-vendor solution is rarely as clean.

See the press release for more details.

Clearleap’s Stream On Demand solution enables operators to tap into Clearleap’s robust search, intuitive browse, and improved discovery of advanced video services through a white label application branded with operator’s own look and feel. Clearleap’s end?to?end, cloud?based platform allows operators to deliver a complete video service over existing broadband networks without dependencies on legacy video infrastructure.

Now Clearleap has announced four small MSOs have adopted their ClearPlay Streaming Services for VOD.

enTouch Systems, Inc. and its cable group, ETS Cablevision, serve a growing number of communities throughout the Greater Houston Area with fiber-to-the-home services. The company has offered on demand services to its subscribers for some time and recently decided to offer TiVo boxes to its subscribers. The ClearPlay streaming option complements the TiVo set top deployment with easily scalable, economical on-demand content.

Greenlight is Wilson, North Carolina’s community network. Like enTouch Systems, the organization was interested in offering its subscribers TiVo boxes for their cable and on demand services. ClearPlay answered the need for a turnkey IP-based streaming service that can scale as more subscribers sign on.

ImOn Communications, headquartered in Cedar Rapids, Iowa, plans to offer new on demand services using ClearPlay streaming services to its subscribers on Roku boxes.

Jackson Energy Authority, based in Jackson, Tenn. is launching new on demand services with the ClearPlay streaming service to its subscribers.

I believe this is the first we’ve learned of ETS Cablevision and Greenlight adopting TiVo. I don’t see it on their sites yet, but since this deal was just announced I’m not surprised. They probably haven’t implemented it yet, let alone launched it to consumers. But we may be seeing these MSOs on TiVo’s page soon.

It is interesting to see an MSO offering services through Roku boxes. Until I saw the Clearleap news last year, and checked out their site, I hadn’t heard of Roku being used by MSOs.

Clearleap will be at The Cable Show in Boston in May, as will I, so I’ll make sure to track them down and check out their solution.

But in looking at this page I noticed something else. TiVo has a general page linking to all of their MSO offerings. Now, we know all about RCN, Suddenlink, Grande Communications, and Charter. But there are two other MSO’s listed on the page which I’d previously managed to overlook: Comporium and Northland Communications.

I have to say, finding TiVo on Comporium’s website wasn’t easy, but it is there. They’re a small MSO with service areas in North & South Carolina. It looks like they put out a press release way back on 2/2/11 announcing the TiVo Premiere. They lease each TiVo Premiere for $16.95/month, which is $10 more than their standard HD DVR for the first box, but only $4 more for each additional box. That doesn’t seem like too bad a deal.

Finding TiVo on the Northland site is much easier. They’re another small MSO, but much more spread out according to their “Who We Are” page:

Northland Communications currently owns and operates smaller-market cable systems in Alabama, California, Georgia, Idaho, North Carolina, South Carolina, Texas and Washington. Northland is headquartered in Seattle, Washington and has a divisional office in Statesboro, Georgia.

It looks like Northland is referring customers directly to TiVo for purchases, but they’re also offering leases on TiVo Premiere units for $13.95/month in ‘select sites’.

Comporium is one of the small MSOs serviced via TiVo’s partnership with Evolution Digital, as much as stated in the press release. I’m not positive about Northland, but I expect the same is true there given their size. If you know of other small MSOs offering TiVo to their customers please let us know in a comment. I’m sure these deals can’t be adding many subscribers to TiVo’s totals, but every little bit is a positive. And I think small MSOs offering TiVo is a good thing for the customers too.

Similar to the Sling Media deal, Monsoon Multimedia made deals to incorporate their place shifting technology into chips from C2 Microsystems and Zenverge. Moonsoon’s tech has been ported to C2′s Jazz product line and is coming to their Tango chip line.

“Monsoon and C2 Microsystems have been working together now for more than two years,” said Gene Liu, CEO of C2 Microsystems. “Monsoon’s engines are now ported to our Jazz product line. We expect that Monsoon will enable our TV customers in China to start showing OTT streaming from their TVs to smartphones, PCs and tablets in or outside of the home. Our highly cost effective Tango chips will start featuring placeshifting this spring.”

Zenverge is incorporating Monsoon’s tech into their ZN200 Quad-Stream Transcoder. Interestingly it sounds like Monsoon Multimedia is using Zenverge’s chips in their Vulkano products.

“Monsoon is very excited about leveraging the flexible HD transcoding and encoding capabilities of the Zenverge architecture in our Vulkano placeshifting products,” said Colin Stiles, Monsoon’s EVP of Sales and Marketing. “We see great potential in adding multi-stream HD transcoding features to our streaming products and we have selected the ZN200 to provide high value solutions to our OEM customers.”

“We are very excited about the new products our customers are launching to truly enable the connected home and extremely pleased to have Monsoon as both a partner and a customer,” said Shawn Saleem, EVP of Marketing for Zenverge. “Portable devices such as the Apple iPad and iPhone, and Android tablets and cell phones, have created a significant market demand for consuming content wirelessly from multiple sources such as Over-The-Top (OTT) and broadcast. The ZN200 is being used with Monsoon’s industry leading placeshifting technology and provides the perfect solution for streaming in and outside the home.”

Monsoon developed five integrated modules for licensees to use in incorporating their tech:

Adaptive Bit-Rate Encoding continuously measures the available network bandwidth and adjusts the encoding bit rate to deliver smooth video streaming Quality of Service (QOS) over a wide range of network conditions.

Http Live Streaming (HLS) has been extended by Monsoon to support a real-time bit-rate control method of delivering live video sources via the industry standard HLS protocol, without requiring pre-encoding and caching of multiple bit-rate copies of the file.

Proprietary Streaming Protocol moves video from inside the home to outside the home with much finer granularity of the video encoding and without requiring any router set up. UDP protocol with hole punching and Network Address Translator (NAT) traversal is deployed to eliminate the need for router port forwarding.

Connection Management is a secure cloud-based service that allows clients to connect to servers without using fixed IP addresses or Domain Named Service (DNS).

Multi-Screen Client Technologies include video playback of placeshifted live TV streams, recording and trick play (pause, fast forward, rewind) on clients, and virtual on-screen remote control for set-top boxes, EPGs and sideloading. Client technologies are available on PCs, Macs, iPhones and iPads, Android smartphone and tablets, BlackBerry phones and tablets.

Between Sling’s deals and these it seems like we might be seeing place shifting in a growing number of products.

I should note that while TiVo’s upcoming transcoder box is using a chip from Zenverge, it does not use Monsoon’s tech. I explicitly asked about this when I talked to TiVo, just to make sure. TiVo’s box uses a home-grown solution.

ONO’s Marketing TV Director, Fernando Meco, stated:

“Since the launch of our TiVo offering in Madrid and Barcelona we have seen an incredible response from customers that have embraced this new world of on demand and Internet-delivered content. We are thrilled to expand the TiVo solution to even more of our customers, building on ONO’s promise to provide best in class products and services thanks to our fiber optic network.”

Customers in ONO’s service areas can get more info from ONO’s website. TiVo’s MSO offerings have really been ticking along nicely.

The ARRIS Whole Home Solution consists of a Moxi Gateway six-tuner DVR and Moxi Players to deliver the content to sets throughout the home. In addition to cable television the Moxi Gateway includes support for DOCSIS 3.0 data services and VOIP for telephone service, MoCA connectivity, media sharing, and an option for WiFi. The WOW! offering will have a 500GB hard drive, which doesn’t seem like a lot when you have six tuners. It will hold up to 300 hours of SD content or 75 hours of HD content.

WideOpenWest will be branding this new offering as WOW! Ultra TV. Pricing is $25/month for the gateway and two players. They even have a video introducing it:

This news comes on the heels of ARRIS announcing that they’re finally giving up on the retail market. As the Moxi website now states:“The Moxi HD DVR and Moxi Mate are no longer available for purchase.” That effectively leaves TiVo as the only advanced DVR available at retail, certainly the only retail standalone CableCARD DVR. (No, I do not consider the Channel Master TV to be in the same category.)

Since ReplayTV’s demise, Moxi has been the only real contender as a competitor for TiVo, but their history is like a Keystone Cops routine when it comes to bungled launches and incomprehensible product plans. When the finally brought a unit to retail it was basically not marketed at all and therefore only known to those who already knew to look for it, and at a fairly high price. Since ARRIS acquired Moxi it has been clear that they’ve been focused on bringing the technology to the MSO market, with little interest in retail. So it isn’t a surprise that they’re pulling out, more that it took this long.

They offer a real competitor to TiVo in the MSO market, which might be a factor in TiVo’s recent deal with Pace. Pace is a major player in the MSO market and makes integrated gateway units, similar in hardware capabilities to ARRIS’s Moxi Gateway.

Pace is a global provider of hardware to the cable, satellite, & IPTV industries, including major MSOs like Comcast in the US. While TiVo’s current MSO deals in the US, with RCN, Suddenlink, Grande Digital, and Charter, all involve TiVo hardware, it makes sense to diversify with other platforms. Larger MSOs may be more comfortable buying hardware from a vendor they already do business with, and which has a proven track record of being able to manufacture and delivery large quantities of units. TiVo is still a relatively small player in the STB world. Also appealing will be the ability to use Pace’s provisioning and device management capabilities and their integrated high-speed data connectivity (aka built in DOCSIS and/or MoCA) for broadband communications and content delivery.

While Pace will be offering TiVo products to customers world wide, the release states that the initial product will be made available to cable operators in the Americas. That sounds to me like there are already initial customers lined up, but not yet publicly announced.

This data supports TiVo’s targeted advertising products. As DVR usage, including ad-skipping, expands, content providers must find a new way to monetize the content. And they need to know which approaches are working, which ads are getting viewed, to optimize their efforts. Like it or not, the content needs to get paid for somehow. And TiVo seeks to address that need with their advanced advertising platforms. The broader the data pool, the more accurate they can be.

Deutsche Bank 2012 Media and Telecommunications Conference
Palm Beach, FL
Tuesday, February 28, 2012
1:40 PM ET
Tom Rogers, President and CEO
Webcast

Morgan Stanley 2012 Technology, Media & Telecom Conference
San Francisco, CA
Thursday, March 1, 2012
10:20 AM PT
Naveen Chopra, SVP, Corporate Development and Strategy
Webcast

The THR22 initially launched back on 12/8, but only in limited markets and it was only available directly from DirecTV. Now it is available nationwide from resellers as well as DirecTV. Which also means the super-sized units are available through WeaKnees.

While the THR22 lacks many of the features of the current DirecTV DVRs, if you prefer the TiVo interface it is the only game in town for DirecTV. And that’s enough for some users.

The Broadcom press release specifically mentions the BCM7425. That’s a MoCA 2.0 enabled chip that can simultaneously decode two HD video streams and transcode them for streaming, generally to portable devices. such a chip could be embedded in a set top box, or it could take the form of a standalone network-based transcoder that takes in the default HD streams, which are generally MPEG-2, and transcodes them to H.264 for streaming.

The ViXS press release speaks in more general terms about the XCode chip family. The Sling Media software has been integrated with the ViXS Xtensiv software stack for the XCode chips. The XCode family has varying features; the high-end 5100 can transcode six HD streams simultaneously while the 4200 can transcode dual streams. All of them have Ethernet support, so they could be embedded in an STB or used in a network-based transcoder. They don’t appear to have MoCA support, but a separate MoCA transceiver chip could handle that, as in the TiVo Premiere Elite.

Support for Sling’s streaming technology in these chips opens the door to the potential for SlingLoaded devices from vendors other than EchoStar. I think that would be very interesting. While EchoStar’s own efforts to market SlingLoaded devices haven’t met with much success, to date they’ve been limited to the Dish Network ViP922 DVR in the US and the EchoStar HDS-600RS Freesat+ DVR in the UK, licensing the tech to other vendors could be a more successful approach.

MVPDs have been showing an increasing interest in place shifting technology as a value add to attract customers. Dish, of course, already has the ViP922 and the Sling Adapter for the ViP722. DirecTV has the Nomad ‘store and forward’ network transcoding box. Various MSOs have trialed or tested place shifting hardware. Building it into their STBs, or offering a network-based add-on box to enable streaming, could be a way for MSOs to leverage the market leading Sling technology.

TiVo was showing of a technology demo of just such a box at CES, though there is no indication that Sling Media’s tech was involved. Still, now that EchoStar and TiVo aren’t involved in a blood feud, perhaps they can finally combine their respective best in breed technologies. TiVo’s demo box has a single Ethernet connection and power, it wouldn’t surprise me if it was using one of the ViXS chips. I doubt it is using the Broadcom chip as that’s slated for availability in 3Q12, though if TiVo brings such a unit to market I would very much expect the production version to have MoCA to ease integration with the Premiere Elite and to make it more appealing to their cable MSO partners. I’m hoping to have more to say about what TiVo was showing as CES soon.

AT&T has settled with TiVo, offering payments that will total at least $215 million, and potentially much more, in exchange for a mutual patent licensing deal. TiVo will receive $51 million up front, followed by recurring quarterly payments guaranteed through June 2018, for a total minimum payment of $215 million. In addition to these minimum payments, AT&T will pay recurring per-subscriber monthly license fees should the level of U-Verse subscribers exceed“certain levels”. Just what those levels are wasn’t revealed in the press release, but TiVo apparently expects the total payments to“significantly exceed” the minimums. In this case what’s good for AT&T is good for TiVo – the more subscribers they get, the more TiVo makes.

The Form 8-K TiVo filed with the SEC regarding this settlement reveals more of the details about the payments as well as the patents involved:

Under the Agreement, AT&T has agreed to pay TiVo a minimum amount of $215,000,000 (the “Payment to TiVo”) plus incremental monthly fees per DVR subscriber if the growth of AT&T’s subscriber base exceeds certain pre-determined levels. Based on currently available industry forecasts, TiVo expects that the total fees payable to it by AT&T under the Agreement will significantly exceed the guaranteed minimum Payment to TiVo. The first $51,000,000 of the Payment to TiVo is due on January 3, 2012 and the remaining amount is due to TiVo in equal installments 30 days after the end of each calendar quarter in the amount of $5 million for the first four calendar quarters and approximately $6.5 million in subsequent calendar quarters through the calendar quarter ending June 30, 2018. Any incremental additional per subscriber fees are due to TiVo on the same schedule.

Pursuant to the Agreement, TiVo granted AT&T a limited license under its advanced television patents, including the patents that TiVo had asserted against AT&T (U.S. Patent Nos. 6,233,389, 7,493,015 and 7,529,465), to make, have made, use, sell, offer to sell and import advanced television technology in connection with AT&T multichannel video programming services, including AT&T U-verse, subject to certain limitations and exclusions. AT&T granted TiVo a limited license under its advanced television patents, including the patents that AT&T had asserted against TiVo (U.S. Patent Nos. 5,809,492, 5,922,045, 6,118,976 and 6,983,478), to make, have made, use, sell, offer to sell and import advanced television technology in connection with TiVo products and services, including products and services provided to other multichannel video programming service providers, subject to certain limitations and exclusions.

We may learn more about the terms when TiVo files their Form 10-K after their fiscal year ends on January 31, 2012.

In addition to the settlement payments there is also the indirect benefit to TiVo in reducing their legal costs by no longer needing to pursue the suit. It also eliminates the distraction and allows their legal team to focus their efforts on Verizon. Speaking of Verizon, that’s where all eyes are now as they’re currently the sole remaining target for TiVo’s patent suits. With victories against EchoStar/DISH and now AT&T, it doesn’t seem unreasonable to expect Verizon to taking a serious look at their chances of victory and weighing it against the cost of a settlement. I fully expect TiVo to also be making a reinvigorated push to establish deals with the remaining US cable providers, such as Time Warner Cable, Cablevision, and Bright House Networks.

Taking a look at the top 10 US MVPDs (as of June 2011):

1. Comcast Corporation 22,525,000 – business relationship to allow VOD access to retail TiVo units, now in trials
2. DirecTV 19,433,000 – business relationship with licensing and new THR-22 DirecTiVo just released
3. Dish Network Corporation 14,056,000 – $500 million legal settlement and licensing
4. Time Warner Cable, Inc. 12,235,000 – no known agreement or licensing
5. Cox Communications, Inc. 4,838,000 – business relationship to allow VOD access to retail TiVo units, in development
6. Charter Communications, Inc. 4,413,000 – distributes TiVo directly to customers
7. Verizon Communications, Inc. 3,848,000 – ongoing patent lawsuit
8. AT&T, Inc. 3,407,000 – $215 million legal settlement and licensing
9. Cablevision Systems Corporation 3,284,000 – no known agreement or licensing
10. Bright House Networks LLC 2,139,000 – no known agreement or licensing

In addition, of course, TiVo is being distributed to customers of smaller cable MSOs Suddenlink (#11), RCN (#16), and Grande Communications (not in the top 25). Each victory, licensing deal, or business arrangement strengthens TiVo’s hand at the negotiating table. TWC, like Comcast, is large enough that they develop a lot of their technology and software in house. As such I don’t really expect them to adopt TiVo as their new platform, as Charter has. However, I would not be surprised to see them make a deal with TiVo to support VOD on retail TiVo units, just as Comcast and Cox have, in exchange for staying out of the legal crosshairs.

Verizon is more of a wildcard. They have a rocky track record when it comes to developing and releasing software updates for their FiOS STBs. And they have a small enough user base that outsourcing their software development to TiVo and benefiting from their economies of scale might benefit them. Their architecture is not all that different from Virgin Media in the UK and ONO in Spain. TiVo has already shown they can handle a hybrid cable/IPTV system with those networks, which is what FiOS is. To me that would be the ideal solution, as FiOS joining Team TiVo would increase development funding. And it is likely that they’d push the addition of features to match what they’ve implemented in house, which would benefit everyone. But they may also simply negotiate a licensing settlement like AT&T’s.

AT&T is pure IPTV and they’re using Microsoft software end-to-end. It was pretty much an impossibility that they’d adopt TiVo’s software for their STBs given the infrastructure they’re using. The licensing settlement is really the best result we could hope for in this case. Cablevision and Bright House could easily adopt TiVo as their next-generation STB platform. They’re smaller than Charter, who already has, and Suddenlink, also a TiVo user, is more than half as large as Bright House.

Oh, there is another reason I think TiVo will move more aggressively to establish deals with more MSOs on the back of this settlement: Google. More specifically Google’s pending acquisition of Motorola, the largest STB vendor for cable systems in the US, and Google TV. Back in August when I looked at the announcement, and specifically at the implications for TiVo, and then more recently in November, I stated that I full expect Google to bring the Google TV platform to Motorola STBs as a standard option.

More and more MSOs are looking at OTT (over-the-top) content to increase their competitiveness, which is a prime reason MSOs have turned to TiVo, and Google TV’s Android platform and apps would be a huge boon. Google has Sage TV to provide DVR technology and placeshifting, which also allows them to compete with EchoStar’s SlingLoaded offerings. They could build the streaming client into every Android phone and tablet sold, as well as Google+, that’s a very big stick – or carrot, depending on how you look at it. If Google’s acquisition of Motorola goes through, they will do this. I’m certain of it; it just makes too much sense.

But it will all take time, most likely a few years. The acquisition itself will take time. And then the work to port Google TV to Motorola HW and/or developing new HW to better support Google TV/Android needs to be done. Then they need to land MSO clients for the new HW/SW bundle, and get it deployed. It all takes time. And that time gives TiVo a window to expand their beachhead in the industry. Once an MSO has a significant deployment of TiVo HW and/or SW in the field they’re much less likely to walk away from that investment and adopt another platform.

I expect TiVo to redouble their efforts on the back of this victory. They may even have some deals in their back pocket to announce at CES this month. But for now they can celebrate one victory in an ongoing war.

Conference Details:
Citi 22nd Annual Entertainment, Media, and Telecommunications Conference
San Francisco, CA
Wednesday, January 4th, 2012
2:40 PM PT
Tom Rogers, President and CEO

TiVo announced this charitable promotion on their blog and via press release on Monday.

Conference Details:
UBS 39th Annual Global Media and Communications Conference
New York, NY
Monday, December 5th, 2011
1:30 PM ET
Tom Rogers, President and CEO

Conference Details:
NASDAQ OMX 27th Investor Program
London, United Kingdom
Wednesday, December 7th, 2011
11:15 AM GMT
Tom Rogers, President and CEO

• DirecTV will finally release the new THR22 DirecTiVo in “early December”.
• Charter will be launching retail “very soon”.
• Comcast OnDemand support is in field trials now.

I think the DirecTiVo news is the most anticipated, so in TiVo’s own words:

Additionally, DirecTV has informed us that they intend to initiate the launch of the TiVo-DIRECTV product in select markets in December with a nationwide rollout to follow early next year.

Still, don’t set your expectations too high. We know the new DirecTiVo is based on the old HR22 DVR and it will lack a number of features found in the current DirecTV DVRs. DirecTV really doesn’t seem to want to release it, but they’re obligated to do so. They’re clearly focused on their in-house units with their five-tuner DVR, new HD UI, and whole-home support.

In other news, TiVo has had their first increase in total subscriptions in four years – adding 117,000 subscribers compared to a 33,000 loss last quarter. This is mainly thanks to Virgin Media’s runaway success, but also growth from RCN & Suddenlink. With ONO, Grande Communications, and Charter coming online, and the new DirecTiVo finally shipping, the MSO subscribers will become even more significant going forward. And TiVo indicated further MSO deals are pending, with TiVo having responded to several Request for Proposals.

Conversely, the retail side continues to slide. They added 30,000 new subscribers, but lost 60,000 old ones – for a 30k net loss. MSOs actually added 147,000 – the lower 117,000 net add is due to this loss. The good news is the new subscribers are worth more to TiVo as the higher monthly fees increase revenue per customer. If & when Comcast launches VOD support on TiVo and provides some marketing and free installations, as promised, it may help the retail numbers. But it seems clear the MSO side of the house is going to be the real growth engine.

Oh, there was one other interesting point. Rogers mentioned that most of TiVo’s development now serves both MSO & retail. They’re building a common code base for all platforms, MSO and retail, to better leverage their R&D spending. In the past the two sides operated pretty much independently. Remember the soft-TiVo product for Comcast & Cox was a completely new Java code base. While retail boxes remained on the conventional development path. Now MSO & retail units will be running common, if not identical, software and hardware will also be shared.

We’re already seeing that with the TiVo Premiere Q for MSOs and TiVo Premiere Elite for retail. It is basically the same box with a different hard drive capacity. And the 14.x software used by MSOs, such as RCN, and the retail units is from a common base. This means that any feature TiVo develops can be released to retail and offered to their MSO partners simultaneously – contractual issues permitting of course. (See Netflix being unavailable on MSO units.) It is also makes things more efficient, you don’t need two development teams both implementing the same thing on different platforms. Even the software for Virgin Media and ONO, which runs on third party hardware, appears to be from the common code base.

One thing I was hoping to hear, but didn’t, was news on the TiVo Preview coming to retail. I really want this and it is annoying that it is available to MSOs but not retail. It is the perfect companion to the TiVo Premiere Elite.

Overall though, I thought it was a pretty good quarter.

Then they eventually did launch a retail DVR at the end of 2008 pretty much by surprise, with no fanfare. But it had major limitations – no OTA support & digital cable only, no analog cable. While the TiVo Premiere Elite has the same limitations, three years is a long time – three years ago most cable systems were not yet fully digital. You could get an external analog cable dongle to enable a single tuner. It was also expensive and lacked OTT services. So, unsurprisingly, it never sold well. Then in September, 2009 cable technology company Arris acquired struggling Digeo for a song ($20 million) as a way into the STB market.

Arris has continued to sell the retail Moxi unit, but it doesn’t seem to have evolved much since it launched in 2008. And what advantages it had, such as having three tuners and whole-home support with the MoxiMate, are eroding with the four tuner Elite and improved provider DVR offerings. And if TiVo launches the Preview at retail it would provide more functionality that the MoxiMate as well.

Arris has continued to struggle in the cable MSO market. They’ve retained small Oregon MSO BendBroadband as a Moxi customer. They’ve been using it since the Moxi Cable HD DVR 3012 in 2008. Charter, formerly Moxi’s biggest customer even with their limited deployment, continues to provide support for units in the field but no longer installs new units. And, of course, they’re moving to TiVo for the future. They’re biggest success with the new solutions is probably Shaw Cable in Canada, which is deploying their whole home system. Arris has been more successful in placing the newer units with cable MSOs (see the lower right corner of that page), but so far it is mainly very small providers or limited deployments with larger MSOs. And some in that list, like Charter, are legacy customers.

But Arris is undaunted, and they’ve decided to re-emphasize the Moxi brand by re-branding their existing whole home solution:

• The Media Gateway is now the Moxi Gateway
• The Media Player is now the Moxi Player
• The Award Winning User Interface is now the Moxi User Interface
• The Services Portal is now the Moxi Services Portal

I think this is a good move. Moxi is a good brand name and they can build on it. It automatically lends itself to “You’ve got Moxi!” style marketing campaigns. It is simple and memorable, like TiVo, and is light years better than generic names like “Media Gateway” and “Media Player”. Branding matters.

The current Arris hardware does have some advantages over the TiVo Premiere Q:

The ARRIS Moxi Gateway, Player, User Interface and Services Portal platform provide a six-tuner HD DVR with 500 Gigabytes of storage. It also includes DOCSIS 3.0 high speed data and voice, a four-port Ethernet home networking router, plus support for Multimedia over Coax Alliance (MoCA) 1.1+ home networking technology and an option for 802.11n Wi-Fi. It can connect with subscriber-owned DLNA-enabled devices across a home network, has CableCARD conditional access and DTCP-IP encryption between the in-home devices.

The Moxi Gateway has six tuners to the Q’s four, it includes a DOCSIS modem for data and an Ethernet router, so it can act as your home broadband gateway, and it supports DLNA which is notably lacking on TiVo. One thing to note though is that this Moxi whole home solution requires at least two boxes. The Moxi Gateway is just a gateway box. It doesn’t have A/V connections. You need the Moxi Player to access the content stored on the Gateway. Even if you just have one TV and one room, you’d have two boxes.

Of course, conversely, TiVo has arguably better DVR functionality, and it supports a slew of OTT services, has a related iOS app (with Android coming), and more. And TiVo has the brand clout with consumers that Moxi can’t hope to match. Still, competition is a good thing, and it sounds like TiVo may be working on a next generation unit with some of these features.

Arris really has their work cut out for them in the cable MSO market. One of the benefits for smaller MSOs in going with TiVo is the boost from the TiVo brand recognition and the OTT services, apps, etc, that TiVo brings to the table. And, to a lesser extent, the same holds true for larger MSOs like Charter. TiVo’s momentum on the back of successful deals like RCN, Suddenlink, and, especially, Virgin Media, is also powerful. We’ll see how Arris’s new branding efforts work out for them in time.