TiVo takes a hit on DirecTV plans
Shares of TiVo Inc. sank 7.51 percent to $5.54 apiece in early trading Thursday following a report from Reuters that said DirecTV, citing company CEO Chase Carey, plans to stop marketing receivers with on-board TiVo digital video recorders (DVRs) later this year.
The news doesn't come as a big surprise, as DirecTV has already said it will reduce its reliance on TiVo technology in favor of a DVR platform from NDS Group. A DirecTV receiver powered by NDS' DVR software is expected to roll out this fall. News Corp. owns big chunks of both DirecTV and NDS.
TiVo's partnership with DirecTV has been a major driver of new subscribers for the DVR pioneer. TiVo ended the first quarter with 3.3 million subscribers, of which 2.1 million were from DirecTV. In that period, 247,000 of TiVo's 319,000 net new subs also came from DirecTV.
Despite its de-emphasized relationship with DirecTV, TiVo has made recent strides in the cable sector. In March, the company scored its first cable deal, with Comcast Corp., and, earlier this month, announced it would market DVR technology as a stand-alone service to small- and mid-sized cable operators that are members of the National Cable Television Cooperative (NCTC). Benton Cablevision of Rice, Minn., was the first NCTC member to take TiVo up on the offer.