TiVo/DirecTV Receiver Delayed to Later This Year From Spring

Shipments of TiVo DVR-equipped RCN set-top boxes and DirecTV satellite receivers were postponed to Q2 and “the latter half of the year,” respectively, TiVo executives said on a quarterly earnings call Monday. DirecTV’s new TiVo DVR/satellite receiver, which originally was to ship in first half 2009, was expected in the spring (CED Nov 27 p2).

The DirecTV product will be delivered in 2010, said a DirecTV spokesman. RCN, which signed on last year to use TiVo technology in its advanced set-tops, was scheduled to field product in Q1, but now will have it in Q2, RCN officials have said. RCN completed field trials early this year and was expected to start leasing TiVo DVRs with a monthly fee around $15 (CED Dec 10 p2).

The arrival of new DirecTV products will be key for TiVo. DirecTV was among TiVo’s early supporters, fielding combo devices in 2000. It parted with TiVo in 2005 when it began deploying receivers with middleware and DVR software from then-affiliate NDS. It signed a new agreement with TiVo a few years ago and still accounted for a large portion of the company’s 1.14 million MSO/broadcaster subscribers during Q4 ended Jan. 31. That was down from 1.68 million a year earlier.

"DirecTV is very much moving along on the development front,” TiVo CEO Tom Rogers said. “It is something that we obviously believe that between the new deals it provides, marketing commitments, minimums and increased sub fees, it will allow us to move forward into the full HD realm of DirecTV’s box world with a national distributor that can sell any consumer anywhere in the United States.” Best Buy is expected to sell the DirecTV/TiVo receivers along with products it’s developing with TiVo, including Insignia brand DVR-equipped LCD TVs (CED Dec 8 p1).

TiVo’s per-sub payments from DirecTV are expected to “substantially increase” from just under $1, TiVo executives said. TiVo’s average revenue per user (ARPU) per month for cable/broadcaster subscribers rose in Q4 to $1.20 from 46 cents in Q3 and 98 cents in Q4 a year ago. The Q3 figure would have been 88 cents, but for the one-time reduction of $1.8 million in cable/broadcast-related service revenues and the one-time reduction of 146,000 subscriptions associated with the correction of a subscription over-reporting error by DirecTV, TiVo has said. TiVo officials declined to disclose the cause of the Q4 increase. But analysts said it could be payments from a new international contract, such as the pact it signed last year with Virgin Media in the U.K. Virgin is expected to start selling the TiVo service later this year.

Meanwhile, Comcast is continuing to sell the TiVo service in the Boston area and has no immediate plans to expand distribution, a Comcast spokeswoman said. Comcast had been expected to take the service to Chicago last year, but those plans were shelved. Comcast, which has installed tru2way technology throughout its system, is said to be funding TiVo’s development of it. TiVo at one point was expected to introduced a tru2way-capable DVR. Naveen Chopra, TiVo senior vice president for corporate development and strategy, hinted during the conference that Comcast may be considering a strategy similar to RCN’s where it leases hardware rather than downloads DVR software to existing set-tops. Glitches in the download of TiVo software has slowed deployment with Comcast, TiVo officials said. “In terms of how Comcast may choose to address” a product similar to RCN’s “I think they made some comments directly about that.” A Comcast spokeswoman declined to comment.

On another matter, EchoStar has 30 days to file a request for a full review by the U.S. Court of Appeals for the Federal Circuit of an appeals court decision upholding a lower court’s finding of contempt against it, TiVo officials said. In a split decision last week, the appeals court sided with U.S. District Court Judge Charles Folsom, who found EchoStar in contempt of his ruling that the company violated TiVo’s time-warp patent and barring it from continuing to sell infringing product.

TiVo’s Q4 net loss widened to $10.1 million from $3.5 million a year earlier despite a rise in revenue to $68.4 million from $59.1 million. Service revenue declined to $38.4 million from $44.1 million, while that from hardware jumped to $23.1 million from $10.7 million. TiVo lost 131,000 net subscribers in Q4, including 72,000 from its own service. It ended the quarter with 1.46 million subscribers to its own service, down from 1.65 million a year earlier. Monthly churn was 2.6 percent. Per subscriber acquisition costs rose to $164 from $114 and TiVo-owned ARPU slipped to $7.58 from $7.85.