TiVo-iPod Deal Trumps Disney

Nov 21, 2005  •  Post A Comment

Television technology is advancing so quickly that the groundbreaking Disney-iTunes deal unveiled just weeks ago is already starting to look like a dinosaur.

With new set-top box capability TiVo is expected to announce today, consumers won’t have to spend $1.99 to view “Lost” or “Desperate Housewives” on their Apple iPods. They can instead synch up their TiVos to their iPods to have recorded shows transferred there overnight.

TiVo has built a feature into its TiVoToGo service to transfer TiVo-recorded shows onto both the iPod and the Sony PlayStation Portable, the two most popular of the new portable media devices.

TiVo insists the new functionality is not intended to wreck the economic potential of Apple’s deal with Disney. A spokesperson for Disney declined to comment, and Apple could not be reached for comment by press time.

“This is a good deal for the consumer, whereas the [Disney-Apple pact] was a deal to find new revenue streams for the broadcasters,” said Raj Amin, president of Amin Media, a strategic consultancy focused on new media. “It will be competitive to the recent deals by major broadcasters to offer downloads for a fee. Good for TiVo users and mobile device users, not so good for the broadcasters.”

While TiVo’s new capability will only be initially available in only a relatively small number of TV homes-about 300,000-the point is that the day of consumer-driven and -controlled media is upon us.

“The technology sometimes trumps the business model,” said Ian Olgeirson, an analyst with Kagan Research, reflecting on the new TiVo feature versus the Disney-Apple structure. However, Mr. Olgeirson pointed out that the market for fee-based downloads still exists because consumers often forget to record a show they want to see and would then purchase that show for a fee.

TiVo is likely to strike more deals to deliver content to other devices. The company last week hired Tara Maitra as VP and general manager for content services, with a role of developing content for broadband delivery and fostering relationships with content companies. She previously worked for Comcast.

“Mobile television is going to be an increasingly demanded service by consumers,” TiVo spokesman Scott Sutherland added.

The new capability will be delivered to TiVo’s current 1.3 million stand-alone customers, but not its 2.3 million DirecTV customers, in the first quarter of 2006 after beta testing later this year.

The new extension of the service rides on top of TiVo’s TiVoToGo capability, which is included in all standard TiVo boxes. Not all customers use the functionality because it requires a home network in the consumer’s house. TiVo estimates that about 300,000 TiVo customers are connected to a home network and 80 percent have a broadband connection in their home, making them candidates for a home network.

TiVoToGo has been a feature of TiVo boxes since last year and allows consumers to transfer shows from the TiVo device to a computer.

To protect content rights, TiVo said it will watermark programs transferred to portable devices to track the shows and ensure the consumption falls under fair usage rules for transfer of personal content, Mr. Sutherland said.