The vital deal is done. American digital video pioneer TiVo watched its share price soar as it finalised an agreement with cable TV giant Comcast.
TiVo's stock rose 75% on news that it is to develop a version of DVR software for the number one US cable operator to market to its 21.5 million subscribers. Under the agreement TiVo will share in subscription revenue.
The deal will also develop advertising capabilities for DVRs, which currently allow viewers to skip through traditional commercials.
Says TiVo vice-chairman Tom Rogers: "The opportunity here is for most of the Comcast subscriber base to have TiVo offered to them. Not only will we be receiving fees that come from that kind of rollout, what is important are the advertising opportunities this creates for the company."
Comcast expects to begin marketing the TiVo premium branded DVR service, which allow viewers to record and pause live TV, by mid-2006.
Despite its cutting edge, high-end technology, the Alviso, California-headquartered TiVo has struggled to increase its current three million subscriber base. It is also facing competition from satellite and cable TV operators who are developing their own DVR services.
TiVo hopes the Comcast deal will be the first of many that will eventually see it turn a profit.
Comcast chief operating officer Steve Burke is clearly thrilled with the agreement, though neither party is willing to reveal financial terms. He says: "The strong TiVo brand, the clear track record of customer loyalty it has and its cutting edge features make this a terrific partnership and exciting new product for Comcast."
Data sourced from Financial Times Online; additional content by WARC staff
