DirecTV to market TiVo's new HD digital recorder

By Michelle Chapman
Associated Press
Published: Friday, Sept. 5, 2008 12:17 a.m. MDT
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NEW YORK — TiVo Inc. said Wednesday it will launch a new high-definition digital video recorder under an extended agreement with DirecTV Group Inc., reigniting a once-cooling relationship.

The new development deal extends the agreement by five years to Feb. 15, 2015, and calls for satellite-television provider DirecTV to market TiVo's DVR products to new customers for the first time since DirecTV began using a rival DVR.

The partnership helps TiVo, a pioneer in DVRs, gain access to DirecTV's HD market. High definition is a key growth area for TiVo, because it generally makes more per unit sold than with standard definition recorders.

TiVo shares gained 24 cents, or nearly 3 percent, to close at $8.75 in trading Wednesday, while shares in Dish held steady at $28.33.

DirecTV and TiVo began working together in 2000 when DirecTV first offered DVRs with TiVo service to its customers. But over time, the relationship became muddled, with DirecTV using DVR technology from NDS Group PLC., a unit of Rupert Murdoch's News Corp., which is a former DirecTV shareholder. Late last year, DirecTV extended its contract with NDS to 2013.

DirecTV has continued to support TiVo service for existing customers, but the subscription base has shrunk as boxes break and as subscribers leave or upgrade to HD service.

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With the new TiVo deal, TiVo gets a chance to serve DirecTV's HD customers. El Segundo, Calif.-based DirecTV, based in El Segundo, Calif., said it will still offer its own set-top boxes to customers, but the new TiVo box will be an additional option. This could boost Alviso, Calif.-based TiVo, based in Alviso, Calif., whoseas its subscriber base has been dropping steadily due to increased competition from generic recorders from cable and satellite operators.

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