Comcast and TiVo seal the deal

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Comcast and TiVo seal the deal

Following up on rumors this morning about the deal, Comcast and TiVo have officially announced that TiVo will supply a PVR system for Comcast subscribers. From TiVo's press release:

Under the terms of the agreement, Comcast and TiVo will work together to develop a version of the TiVo service that will be made available on Comcast's current primary DVR platform. New software will be developed by TiVo and will be incorporated into Comcast's existing network platforms. The new service will be marketed with the TiVo brand, and is expected to be available on Comcast's DVR products in a majority of Comcast markets in mid-to-late 2006.

This long-term, non-exclusive partnership will provide millions of Comcast customers with the opportunity to choose the TiVo service, including TiVo's award-winning user interface and features like Season Pass(TM) and WishList(TM), as an additional option. In addition, the service will showcase TiVo's home networking, multimedia, and broadband capabilities.

[...]

As an extension of the relationship, TiVo and Comcast will make TiVo's interactive advertising platform available across Comcast's customer base without interrupting the award-winning TiVo subscriber experience.

This sounds like really good news for TiVo, their stock is already on the up from this morning's rumors and the announcement. It also gives Comcast a premium PVR product that will be an asset in their competition against the satellites and other cable companies.

by George Hotelling March 15, 2005 in News, TiVo

Comments

I immediately wonder if this relationship, will make it easier for TiVo to get to a bidirectional CableCard standalone HDTV.

I hope so!

rampy

Posted by: rampy at Mar 15, 2005 7:54:55 AM

"incorporated into Comcast's existing network platforms" very interesting. Go back to comments in the last Q conference call about moving to PC platforms. TiVO does not have a strong R&D track record (one year for HME, one plus years for TivoToGo). This is a entirely new software project. Very hard work. Perhaps they are going to leverarge some of the expenses by also developing versions for the PC. Comcast is using Motorola or S-A DVRs now?
Also dissapointing not until 2006. However, that would enable Tivo to get HDTV units into homes, and avoid the $500-$600 in upfront costs (Comcast sucks that up as rental). Netflix delivery always a side game, and you need to have Comcast buy into that b/c of bandwidth concerns.

Posted by: charlie at Mar 15, 2005 7:58:27 AM

Woha.. I wonder what those ANALysts that had Sell rating on TiVo stock yesterday are thinking. Same goes for TiVo naysayers like Thomas Hawk. Tsk tsk tsk.

But TiVo will still die? Right?

Posted by: Telda at Mar 15, 2005 8:04:53 AM

Well, analyst can only analyze based on the past performance and all the currently available information to make a reasonable projection. If i'm not mistaken the analyst were saying in effect, "if TiVo doesn't do something... I don't see how they can be profitable by the end of 2005 therefore I give it a sell rating" Getting in bed with Comcast is definintely "something" =P

heck, the stock price was jumping on apple aquiring tivo rumours... rumours aren't exactly a sustainable business model =P

You can have valid concerns about TiVo the company and still like/appreciate their product and want them to succeed.

rampy

Posted by: rampy at Mar 15, 2005 8:16:07 AM

This deal marks a critical inflection point for TiVo. The biggest concern was always that any cable deal would be totally restrictive from a technological deployment perspective - as the DTV deal was. According to the press release / 8-K, this deal encompasses the full scope of TiVo's technology. Comcast has the largest footprint / installed base of any of the major cable companies, by a rather significant margin. This is a total game changer, in so many respects.
If this deal materializes according to the terms of the contract (e.g. TiVo meets all deadlines, etc.), I firmly believe it finally represents the end of the TiVo "death watch".

Posted by: New York at Mar 15, 2005 8:31:31 AM

This is great news! I've used Comcast's less-than-perfect DVR (a Sci Atl 8000HD box) for 4 months now. It will be great to get use of the Tivo software in the next year (just wish it would happen SOONER than mid-2006!)

As Comcast uses several different DVRs in different parts of the country, will Comcast subscribers in entire country get Tivo-ized box from Comcast or is it just selected regions?

Posted by: Kevin at Mar 15, 2005 9:12:46 AM

The deathwatch rebuttal (previous post) mentioed that Tivo will die 2006, 2007, Tuesday. Seems strange to say 'Tuesday' in that context.

Well, with today's big news, I have to ask, was this a hint?

Posted by: Tyson at Mar 15, 2005 9:48:42 AM

Today is a good day. :-)

Posted by: MegaZone at Mar 15, 2005 9:54:38 AM

It all has to do with the intellectual property really. TIVO, being the first in the game, holds alot of valuable patents. Comcast could spends hundreds of millions going around, over, ect, but in the end, it dawned on them that bringing TIVO into house puts many very valuable patents into their vaults.

You either pay for them now, or you fight over them later.

Posted by: Ray Setzer at Mar 15, 2005 10:01:36 AM

"It all has to do with the intellectual property really. TIVO, being the first in the game, holds alot of valuable patents. Comcast could spends hundreds of millions going around, over, ect, but in the end, it dawned on them that bringing TIVO into house puts many very valuable patents into their vaults."

Ding!

Posted by: Jeffrey at Mar 15, 2005 11:16:39 AM

My question is whether current Tivo box owners will be able to transfer lifetime subsccriptions to a new Comcast/Tivo box and thus shed a component.

Posted by: John at Mar 15, 2005 11:58:13 AM

I doubt it. The box would be rented through Comcast just like their current DVR's.

Posted by: Lars at Mar 15, 2005 12:29:17 PM

Yeah, this deal is for software to run on their existing STBs. I don't see Comcast changing their model, you'll still rent the box - then 'TiVo Service' will be a line item you can pay for. They may offer it as a premium - you get the box with the basic in-house DVR software, and you can opt for TiVo for a fee. Or it may be the standard DVR software - details unknown as of yet.

I wonder how this will impact their trials of the Microsoft DVR software - another option, or dead? And Comcast has used different DVRs in different locations, so either they'll have some HW swapping to do, or TiVo is porting to multiple platforms.

Posted by: MegaZone at Mar 15, 2005 12:36:15 PM

This is great news! Although even if Tivo had 'died' I think the community would have come together so that people could've still gotten their program guide updates.

http://oncemore.withfeeling.org

Posted by: Michael at Mar 15, 2005 1:42:33 PM

It makes more sense as the default software. Comcast probably won't want the extra hassle of supporting two different UIs.

It's probably premature to assume that the Comcast-branded TiVo will have all the same features as the current top-of-the-line models. There will almost certainly be more restrictions on what you can do with the data and on how the box interacts with other systems. But even so, it should be a potent combination. Comcast's dual tuners, (technically) higher capacity, quicker response time and support for On Demand and HD...TiVo's cleaner UI, deeper guide data, more robust recording options...that would kick so much ass it'd run out of ass to kick and have to start kicking buildings and furniture.

Posted by: Lazlo at Mar 15, 2005 2:37:34 PM

> It's probably premature to assume that the
> Comcast-branded TiVo will have all the same
> features as the current top-of-the-line models.

Well, just call me Mr. Didn't-Read-The-Previous-Story's-Comments-First...

Posted by: Lazlo at Mar 15, 2005 2:40:37 PM

Curious to know...

Say you currently have a Comcast box - would you pay an extra $10 a month to rent TiVo software for it?

I'm on the fence on this one. My current 6412 works pretty well. I'm not sure it would be worth it. Hmm.

Posted by: Bryan at Mar 15, 2005 3:48:40 PM

Will the Comcast TiVo be nationwide all at once, or will it be gradually introduced like Comcast's other stuff; Big cities first, small towns last? There are still a bunch of towns that haven't yet got the CURRENT Comcast DVR.

Posted by: Jerome Nicholson at Mar 15, 2005 6:40:25 PM

$10 would be too high, but it'd be worth something on top of the current price to get additional functionality, a better user interface and somewhere to drop bug reports.

Posted by: Tom Clancy at Mar 15, 2005 6:40:47 PM

Dear TiVo,

Brian Roberts would like to schedule a TiVo recording from his cellphone and watch it an hour later. Get to it! Chop chop! :-)

TiVoToGoGo?

Posted by: jonbaer at Mar 15, 2005 7:11:34 PM

Well, a few comments on what this actually means over at TiVo HQ and for the rest of us. TiVo has had an internal power struggle between two different camps. One camp, led by Ramsay, felt that TiVo needed to focus on generating substantial (i.e. profitable) monthly fees on the service, while (most importantly) retaining control over the technology direction of the product/service. The second camp has been all about driving consumer growth through carrier channels (as it turns out, at almost any cost.) It appears that this internal struggle has run its course and the latter group has prevailed. This is what I believe this ultimately means for TiVo…

TiVo is going to become a two-headed monster (and not in the positive sense of that term)…

Head 1: Right now, TiVo gets substantial subscriber growth from the sale of DirecTiVo devices. These sales add very little to the bottom line. In fact, I would say that at $1, TiVo has been right to downplay the value of this revenue and this relationship. It appears that the Comcast deal will add substantial additional subscriber growth, although at a price point less than $1. (I would anticipate that the final number was the actual dollar amount per month at which TiVo felt that they actually broke even on the deal. They have a good idea what that number is now having dealt at length with DirecTV.) Since they don’t make any money on the hardware (certainly in this case) and they won’t make any money on the service, this head is all about maximizing the leverage that a large customer base will afford with advertisers. For this head, advertisers are king, not customers.

Head 2: While TiVo does not generate substantial growth from the sale of devices directly to consumers, these sales are their bread and butter. While the cost of marketing has escalated, TiVo can actually make money on their current subscription fees if they decided to ramp down marketing considerably. As I believe Ramsay said in an IR call recently, “FY 2006 is all about $12.95 per month” (Well, not quite Mike…) Anyway, the point is that for this head, the goal is all about maximizing the value of the product for consumers to ensure people keep paying a monthly fee for service. For this head, customers are king, not advertisers.

I frankly think this is a bad position to be in because some constituent is going to suffer at some point, maybe not tomorrow or even this year, but soon. As time progresses, TiVo will be forced to focus additional attention of folks like Comcast until eventually, their priorities change completely. I believe that the new priority list for TiVo is going to evolve into something more like this:

1. Carriers,
2. Advertisers,
3. Consumers.

As a consumer, I don’t like this priority list. But either way, they need to resolve this issue or risk disappointing all their constituents (as TiVoToGo clearly demonstrated.)

In my opinion, this move was all about satisfying “The Street” and placating a jittery board who had lost faith in TiVos current trajectory. The board of TiVo got freaked out about missing the boat on this whole thing and struck a deal that, in my opinion, shortchanged the long term advantages that TiVo had for the near-term benefit of minimizing the risk of outright failure. I think this was a mistake.

Comcast was in the process of getting their PVR act together, agreed. But their PVR was always going to be fundamentally limited due the focus of Moto on the needs of their primary constituent (Comcast) and their secondary constituent (Advertisers). Moto wasn’t (and isn’t) going to drive for the introduction of a new, more open architecture that allowed users to develop applications for their devices. Moto is not going to open their device up so that consumers can choose whether they get their content from the “closed” network of their cable company, or their “open” broadband Internet connection. Moto doesn’t have the incentive to do so (as a matter of fact, it has the direct incentive not to.) TiVo has the opportunity to move beyond the first phase of this technological evolution (pausing a fast forwarding live TV – whoopty %^@#$ing do!) and participate in the most important second phase of this transition, the movement to, as Jeremy Allaire puts it, the “Internet of Video.” This is the giant killer opportunity of this whole adventure, and I think TiVo is trading it in, for large part, because they got confused somewhere along the way about who they were building products for.

In my opinion, this is actually a sad day for TiVo and its customers. They will certainly stick around as a result of this deal, but I think three or four years down the road, when all is said and done, people will remember this day as the day in which TiVo traded its uncertain but bright future for a future that was more certain, but certainly and substantially more diminished.

I hope I’m wrong.

Posted by: Alex Rowland at Mar 15, 2005 10:07:42 PM

Alex, correct me if I'm wrong, but Motorola ships makes their boxes (MOT-6412) with USB 2.0, Firewire, Ethernet, all of the bells and whistles. It's Comcast who makes sure these features are disabled.

Posted by: Bryan at Mar 16, 2005 5:16:14 AM

Right, but my point is that Moto is not going to do anything to open up the functionality of these bells and whistles without Comcast's approval (which I don't believe will be forthcoming anytime soon.)

Posted by: Alex Rowland at Mar 16, 2005 10:12:15 AM

Right, Motorola won't do anything to open up these features because they do not work for the consumer. In this situation, they're B2B. Their customer is Comcast.

Posted by: Bryan at Mar 16, 2005 3:49:50 PM

"TiVo is going to become a two-headed monster (and not in the positive sense of that term)…"

You assume this is a bad thing.

There's nothing wrong with two heads; you assume they will be working against each other, but Apple for instance shows how you can have two heads (software and services vs. hardware) and have that tension be a positive thing rather than negative.

Your second assumption is that the Ramsay camp, or "head 2", lost to "head 1" in the Comcast deal.

Where is the evidence of that?

We don't know the financials, but look at where Ramsay won, where he got things from Comcast that DirecTV didn't give him: HMO/HME and the other TiVo networking features, and TiVo advertising ("yellow star") on the Comcast boxes.

That's a huge concession from Comcast. It's a pro-consumer, pro-Ramsay/"head 2" concession. Yes, even the "yellow star" commercials are pro-consumer, as these are strictly non-intrusive, opt-in, voluntary advertising that is not pushed at the consumer against his will.

There are certain to be things not mentioned in the press release that Comcast will be allowed to do that will work against customers, but this is still a much better deal from the point of view of the customer than the DirecTV deal.

Besides, nothing in the Comcast deal does anything to slow down TiVo's "head 2" push towards CableCARD TiVos; the only thing holding that up right now is the FCC.

There is no reason why TiVo can't pursue a "two headed" strategy and be very successful. Those who want the convenience of the cable DVR with TiVo will get that, and those who want greater control and consumer friendliness will get the TiVo standalone boxes.

It's a win-win deal, unless there is some deep dark secret that wasn't disclosed in the press release.

Posted by: David Deane at Mar 16, 2005 7:18:52 PM

I agree with David Deane - the Comcast deal should provide a really strong impetus to drive TiVo to innovate - if the TiVo service for Comcast isnt far more functional than the stand-alone service, theyre not going to get any consumer uptake at a higher service fee level. Its structured such that if TiVo doesnt innovate, the deal wont be worth anything. And that sounds very pro-consumer...

Posted by: New York at Mar 16, 2005 9:09:24 PM

I wonder if we'll hear any more from TiVo about the Cablecard TiVo development. That story would have been a perfect ploy to force Comcast to come back to the negotiating table - which they obviously did. Comcast and other cable companies hate the idea of the Cablecard.

Because of all of the outside considerations I don't think this deal will be as a good a thing for TiVo fans or Comcast subscribers.

Comcast has a way of disabling features in a "consumers last" decision. For example, try to get the channel guide in a Comcast digital STB to display ONLY the channels you actually receive, much less only your favorites. Comcast thinks if you see all of the channels you aren't authorized for you'll want to buy more. TiVo has always made trimming the guide easy. We'll see which way it ends up when a Comcast DVR runs a "customized" TiVo UI.

Remember that last year Comcast disabled the serial port on the digital STB to make it harder to use with a standalone TiVo. We can count on more of that kind of "customer focus" from Comcast.

Posted by: Mike Easter at Mar 20, 2005 9:12:13 AM

This is great news for TiVo lovers. And it probably won't be $10 a month. DirecTV only charges $5, unless you have the $80 programming package, in which case it's free.

People will deal with any PVR platform, but TiVo is the only one anyone loves.

Posted by: Doug at Apr 8, 2005 4:29:27 AM

I am thinking about buying a tivo box sometime within the next week, why not just buy the box instead of renting it from cable? Plus the box is no cheap now.

Posted by: Bonnie at Apr 18, 2005 6:02:10 AM

How about the news regarding CBS and ABC selling primetime on demand programming. I know that this is exclusive to CBS/ABC owned broadcast facilities, but my question is this:

Will these broadcastors deny TiVo subscribers the right to record these types of On demand programs to their TiVo PVR's?

I'm sure that most would agree that paying to view these programs is outragious in itself, but if it is an exclusive arrangement, I don't see how TiVo subscribers could take part in it. Making TiVo an even less valuable stock and serv ice to own...

Posted by: Scott Heatherly at Nov 21, 2005 1:26:00 PM

I just called Comcast and they didn't know anything about the Tivo deal or when there would be new DVRs.

Posted by: Daniel at Mar 15, 2006 1:21:07 PM

as of 9/27/06 comcast has confirmed that the tivo update will be done in late 06 .. no exact date was given.. GOOD NEWS

Posted by: mblind at Sep 27, 2006 9:07:08 AM

Attention: Comcast HDTV subscribers!!!Comcast is gearing up to add new HD channels so its time to e-mail or call them and request some new HD channels such as:HDnet, HDnet movies,National Geographic HD, Universal HD, Food Network HD, HGTV HD, FSN HD (Fox Sports Network), A&E HD, NFL Network HD.The more request`s they recieve the more HD channels we get.Because they have been dragging their feet about it so far...They need to hear our oppinions!!

Posted by: Samuel at Oct 22, 2006 3:14:32 AM

Cool, another "Let's have a meeting to schedule a meeting" announcement.

Please throw this in the Vaporware section. Comcast (cable companies in general) is the most lethargic company in the business.

It's so easy to announce a future product.

If Comcast were a little kid, I'd tell it, "Shut your little mouth little punk and don't open it until you've something real to show!" as I performed a street-level pimp slap across its face.

Posted by: patrik at Jan 9, 2007 11:53:54 AM

I have only had a Moxi HD from comcast for about a month and it has a few problems.
#1 they did not tell me that I am a Beta tester and that all the user ports are dead.
#2 it locks up and I have to turn off the power to reset it.
#3 it studders.
#4 it has pixelation attacks and some so bad you can only give up watching.
#5 when a program is recorded the show starts one minute to soon and stops one minute to soon.
#6 Hard drive says it is full when it is not???

Does anyone know how much they are paying me to do this testing and were do I send the reports?

Thank you
Mac - Mac4TBH@hotmail.com

Posted by: Mac4TBH at Jan 12, 2007 7:12:51 AM

UPDATE:
They exchanged the Moxi box for another and two days later I called them. I requested a 6414 or a 6416 and to make this short I now have a working 6416III and after one week it is working just fine. Rummer has it that they are "soon" to make a change...

now back to my easy to see and use menus and HD TV shows.
Mac4TBH@hotmail.com

BTW I have used the internet to FIX problems that I have had under my HMO therefore posting what others do to me gets results.

Posted by: Mac4TBH at Jan 20, 2007 2:54:34 AM

I just resently got 2 dvr boxes with comcast I like them but only one thing wrong with them is you cant hook your vcr to them or watch a vcr tape or dvds on it the way is hooked up.It's the motorola dvr box who ever made the decison to make the box like that was a very crudy idea. At least the brown cable box lets you use the vcr. The bad thing with that is you only can watch & record one show at a time. I was told by my installer there's another dvr box that will let you hook up to the vcr and they are out of them. Well they need to order alot more of them. I'm very unhappy the way it is set up. I like watching dvds once in a while. I think they need to add a channel called the chiller. ok bye Danessa

Posted by: DANESSA at Apr 27, 2007 9:20:24 PM

Comcast and TiVo seal the deal

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