By MAY WONG
SAN JOSE, Calif. (AP) - Shares of TiVo Inc. (TIVO) rose more than 5 percent Wednesday morning after the digital video recording pioneer announced it had extended a partnership with satellite TV provider DirecTV Group Inc. for another three years.
Under the agreement, DirecTV will continue to provide TiVo service to its existing subscribers. Both companies also extended their advertising relationship and agreed not to assert patent rights against each other.
The companies didn’t disclose specific financial terms of the deal but said the economics were similar to their 2003 agreement.
TiVo’s revolutionary technology lets people record television without the hassles of video tapes. Users can pause live TV, do instant replays and begin watching programs even before the recording has finished.
TiVo had about 4.4 million subscribers as of January, but 2.8 million of them were DirecTV subscribers who bought the satellite company’s TiVo-based receivers.
Alviso, Calif.-based TiVo is facing stiffening competition from bigger companies making their own DVRs, including Motorola Inc. (MOT) and Scientific-Atlanta Inc., which has been bought by Cisco Systems Inc. (CSCO) DirecTV itself has plans to also use DVR technology from a sister company, News Corp. (NWSA)’s NDS, in its boxes next year.
TiVo is in the midst of a jury trial against DirecTV’s rival, EchoStar Communications Corp. (DISH), the parent of Dish Network, alleging the satellite provider is infringing on its DVR patents. Closing arguments in that case in Marshall, Texas, were scheduled Thursday.
TiVo shares rose 38 cents, or 5.1 percent, to $7.89 in morning trading on the Nasdaq Stock Market.
Anyone that has DirecTV with Tivo and has been following the relationship between the two companies knows this really isn’t new news.
It is common knowledge that Tivo would still provide program scheduling content to the 2.8 million DirecTV customers with Tivo.
Just because DirecTV has started to lease its own DVR box doesn’t mean the millions of Tivo based DirecTV tuners would simply stop working. This is similar to how long DirecTV ’supported’ Ultimate TV, which might still be the case.
I am sure at some point down the road once Tivo based DirecTV receivers get below a certain number the ‘partenership’ might cease. At any rate I think the long term future for Tivo as a corporation is not a good one. Someone will buy them, but who?
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