TiVo's cable connection won't
atone for DirecTV loss …at least not for awhile
Deals with Comcast Cable and Cox Communications certainly won't hurt the cause of DVR pioneer TiVo Inc., but a recent analysis shows that those arrangements might not be enough to quickly offset the wind-down of TiVo's relationship with DirecTV.
"While bulls hang onto cable deals and advertising opportunities, we do not think [TiVo will] be able to offset declines at DirecTV and overall lower sub growth," wrote Oppenheimer & Co. Inc. analyst Alan Bezoza, in a recently issued report. "After attacking multiple strategies, we feel the company needs to focus on what it really would like to become when it 'grows up'."
Bezoza, who initiated TiVo coverage with a "Neutral" rating, acknowledges that TiVo's relationship with DirecTV is nothing to sneeze at, since DirecTV accounted for 64 percent, or 2.8 million subs, toward TiVo's totals. DirecTV has since opted to go with DVR software from corporate cousin NDS Group.
But how well or how quickly will new cable deals help to fill that gap for TiVo?
Bezoza rightly explains that TiVo's cable deals are non-exclusive, meaning it will be competing with cable's existing DVR services.
"While this could add some subscribers and revenue growth, we don't think it will offset the $33 million of annual revenue from DirecTV that has begun to wind down," he explained.
Bezoza said he expects Comcast, Cox or any other MSOs that hook up with TiVo to charge in the neighborhood for $5 extra per month for a TiVo-enabled DVR—above and beyond the $10 or so they already charge customers for DVR service. Like TiVo's deal with DirecTV, expectations are that cable would "own" the customer, while TiVo gets about $1 per sub per month.
Based on an "aggressive" forecast, Bezoza estimates that the revenue opportunity with TiVo relative to its deals with Comcast and Cox will be just $18.6 million in 2010, with the assumption that 20 percent of all Comcast and Cox DVR subs opt for the TiVo service and swallow the premium that comes with it. That, of course, would not come close to replacing the annual revenue TiVo is getting from DirecTV.
Those numbers aside, Bezoza also questions whether customers who use cable's generic DVR would be willing to pay more for the bells and whistles TiVo offers, or if they would be sophisticated enough to even understand the difference. Another potential barrier for TiVo: cable's base of DVR subs "are incredibly satisfied with their current product," meaning cable's strength in this case would actually make things more difficult for TiVo's cable play.
—Jeff Baumgartner, Editor in Chief, CED magazine and xOD Capsule
Gemstar throws book at Digeo, Charter
Gemstar-TV Guide went on the offensive late last week, claiming that interactive guide technology from Digeo Inc. infringes on certain Gemstar IPG patents.
The case, filed in the Federal Court in the Central District of California, targets the allegations at Digeo's "Moxi" guide. Digeo corporate cousin Charter Communications, "by deploying unlicensed Moxi guides, is also liable," Gemstar TV Guide claimed.
Charter and Digeo are both linked to Paul Allen.
Gemstar-TV Guide said it filed the suit after licensing discussions between it and Digeo broke down, and only after Digeo recently filed antitrust litigation against Gemstar-TV Guide. On the latter, Gemstar said it believes Digeo's antitrust claims "are without merit."
"Digeo's refusal to negotiate a patent license with us, and its decision to file suit against us, left us no option except to pursue legal remedies to protect the value of our intellectual property," said Gemstar-TV Guide EVP and General Counsel Stephen H. Kay, in a statement.
The case marks a litigious return for Gemstar, which had fought IPG patent spats for years against guide rivals such as Pioneer, whose set-top and IPG software is now under Aptiv Digital Inc., and Scientific Atlanta. Those cases have since been settled.
An official for Charter said the MSO will not comment on the most recent case until it has a chance to fully review it. Digeo officials were not immediately available for comment.
Digeo also has deployments with operators such as BendBroadband, Comcast, NewWave Communications and Sunflower Broadband, but they were not mentioned in the suit. A Gemstar spokesperson said Charter was named in the suit because it is the largest customer of Digeo's Moxi guide.
Digeo, which claims to have software powering about 400,000 media centers, announced last week it had obtained three new patents for its TV and digital video recorder guide and user interface, including the use of the guide's "dual-axis" interface.
Tandberg synchs up 'Atlas' series
Tandberg Television's recent acquisition of GoldPocket continues to pay some interactive dividends. The latest: a deal to supply enhanced television applications for Discovery Atlas.
Discovery Atlas, which runs each Sunday night on Discovery HD Theater, offers interactivity via a two-screen (PC and TV) model that synchronizes the broadcast program with a Web-based application.
Interactive harmony - An example of how the Web-based,
enhanced TV application synchs up with Discovery's ambitious 'Atlas' series.
Interactive features include trivia questions, bonus info on cultures and stories in the series, additional facts and figures on the country being profiled, and jigsaw images that viewers can collect to create a scenic postcard.
Following its launch on Oct. 1, the series so far has profiled China, Italy and Brazil, with Australia on deck. Over a coming five-year run, Discovery Atlas plans to "explore" 20 countries.
Hauppauge bundles Orb for TV place-shifting PCs
Hauppauge Computer Works Inc. has agreed to outfit its WinTV-PVR TV tuners with a television place-shifting application from Orb Networks Inc.
The Orb place-shifting app will lurk inside Hauppauge's
new line of TV tuners. Show here is the company's
WinTV-PVR-150 board for PCs.
Hauppauge noted that its new PC-based TV receivers will enable users to watch and record TV shows on their computers. Orb's software will be offered with Haupauge's internal WinTV-PVR-150 board and USB-connected external platform.
This will mark the first time the bundle has been offered in the U.S. Orb and Hauppauge initially launched the combo this summer in Europe.
The U.S. version, to be offered in stores such as Circuit City, CompUSA and Best Buy, will sell in the range of $99 to $149. It will run on Windows XP and Media Center PCs.
Orb's application is also designed to program DVRs remotely via cellular handsets.
RCN taps Aptiv for IPG switch
RCN Corp. has replaced an interactive program guide and set-top navigation system from Gemstar-TV Guide International with a new platform from Aptiv Digital Inc.
Enhanced parental control features are a selling point for Aptiv.
RCN, which uses digital set-tops and headends from Motorola Inc. across the board, said it has deployed the Aptiv guide in its Boston, New York, Eastern Pennsylvania, Washington D.C., and Chicago systems. In August, RCN announced it had sold its San Francisco assets to Astound Broadband for $45 million in cash.
RCN noted that the new guide will feature enhanced search and parental control applications. On the latter, the IPG can restrict access by content advisories such as "Adult Situation" and "Fantasy Violence," in addition to standard methods that can restrict by time, ratings, channel and title.
"RCN chose Aptiv Digital's interactive navigation platform to provide this service, which is designed to optimize Motorola-based digital cable set-tops," said RCN VP of Operations Don Channell. "During the past month, RCN customers have been notified of the new interactive guide as well as the enhanced features they would be receiving and their changeover date."
A Gemstar-TV Guide spokesperson said RCN opted not to renew its contract with the Gemstar guide, although RCN continues to carry the company's linear TV Guide Channel.
The RCN deployment is significant to the growth of Burbank, Calif.-based Aptiv, which seceded from Pioneer last year, and was formerly known as Pioneer Digital Technologies. It continues to market IPG products under the "Passport" brand.
VOD streams to blossom
VOD streams worldwide will grow by several orders of magnitude in just the next five years — from 1.67 million in 2005, to 163 million in 2011 — according to ABI Research.
Traditional video-on-demand services may not be growing at a particularly rapid pace, the company said, but the introduction of time shifting, network PVR, and mobile video will propel the demand for VOD technology as the number of concurrent, time-shifted streams of video grows rapidly.
The expected growth of VOD is the impetus behind Cisco Systems Inc.'s acquisition of Arroyo Video Solutions, Harmonic Inc.'s buy of Entone Technologies' VOD assets, Motorola's purchase of Broadbus Technologies, and Cablevision Systems Corp.'s ambitious network DVR project.
ABI said the timing of the acquisitions indicates that VOD is no longer a niche market.
Berenson heads up new Vidiom division
Vidiom Systems has established a new division that will focus squarely on integration and deployment of OCAP (OpenCable Application Platform) - a CableLabs-specified middleware - as well as enhanced and interactive television applications and IPTV services.
The unit, aptly dubbed the Integration and Deployment Group, is headed up by Jeff Berenson, who is serving in the also appropriately-named position of VP of Integration and Deployment.
Jeff Berenson heads up
Vidiom's new Integration
& Deployment division
The newly-created team will focus on a suite of services aimed to help operators define how OCAP and iTV affect their specific networks, develop network integrations, establish business processes and operational support systems, and actually roll out services.
Berenson has gained iTV experience with technology based on OCAP, MHP, OpenTV and Motorola technologies for operators such as Comcast Cable, Time Warner Cable, BSkyB, Premiere of Germany, UPC (now UGC), and BellSouth, among others. He joins Vidiom following a career spanning companies such as OpenTV, Interactive Broadband Consulting, ITV Partners, and Bearing Point.
ADB Group of Switzerland acquired Broomfield, Colo.-based Vidiom last year. Vidiom has linkages to OCAP Development LLC, a joint venture of Comcast Cable and Time Warner Cable.
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Web-based "living" deployment chart. If you have a new deployment to report for the VOD Scorecard and the Web-based deployment chart, please contact CED Editor Jeff Baumgartner.