Cable Operators

Comcast Scraps TiVo Set-Top Deal, But Will Open VOD Tap

5/09/2011 10:03 AM Eastern

Comcast terminated its set-top software development agreement with TiVo -- ending more than six years of work trying to offer the TiVo user interface as an option to customers -- while the MSO has agreed to open its video-on-demand library to users of TiVo Premiere DVRs bought at retail.

Under their original agreement in March 2005, Comcast had hoped to offer TiVo-based DVRs running on Motorola hardware and eventually Cisco Systems boxes across its entire footprint. But the project was beset with delays and Comcast launched the service only in its New England market, starting in late 2007.

Now, instead, Comcast has agreed to provide access to Xfinity TV On Demand content, with more than 25,000 titles in 80% of its footprint, on TiVo Premiere set-tops in "many of its largest markets." The first is expected to be the San Francisco Bay Area, but the companies didn't announce expected timing of the rollout.

Comcast and TiVo plan to jointly promote the capability in retail and other sales channels, and the MSO will install TiVo Premiere set-top boxes with its cable service at no additional charge for its customers when the service is available in those markets.

The VOD agreement is similar to the one TiVo reached last summer with Cox Communications, which also had previously planned to offer set-top boxes running TiVo's software.

The scaled-back deal between Comcast and TiVo comes a week after TiVo reached a landmark settlement with Dish Network and EchoStar, which are paying TiVo $500 million to resolve the companies' patent-infringement litigation that dates back to 2004.

TiVo and Comcast terminated the previous software development, licensing and marketing agreement between them on May 5, 2011, according to a TiVo 8-K filing Monday with the Securities and Exchange Commission. Simultaneously they entered into the agreement on the VOD front.

Comcast actually terminated funding for engineering services for the development of additional releases of the TiVo-branded software on Dec. 31, 2010. Comcast paid TiVo $12.3 million and $16.7 million for the twelve months ended Jan. 31, 2011, and 2010, respectively, in technology revenue as well as $4.6 million and $10.1 million for those years respectively in cost of technology revenues, according to TiVo regulatory filings.

Comcast retains the intellectual property rights granted by TiVo under the original agreement for the original term, which runs through June 30, 2014, with renewal terms ending March 15, 2019. In addition, Comcast retains a license to use the TiVo-branded software solution during the term in which case it would continue to pay TiVo such associated license fees.

Neither Comcast nor TiVo ever disclosed how many of the MSO's customers in New England opted for the TiVo boxes. At one point, Comcast had expected to make the TiVo user interface the "primary" option for DVR customers in at least one of its markets.

Now they're focused on delivering Comcast's VOD service to TiVo's retail users.

"Adding Comcast's On Demand library to TiVo Premiere is a fantastic win for consumers because it will offer access to the ultimate television viewing experience with the programming viewers want," TiVo president and CEO Tom Rogers said in a statement. "Traditional TV channels, On Demand and broadband delivered content will all be accessible with TiVo's universal search capability and TiVo's stunning HD user-interface."

Comcast senior vice president and general manager of video services Marcien Jenckes commented, "We're pleased to combine Comcast's industry leading On Demand library with the innovative TiVo experience and provide our customers even more choice and convenience. Working with TiVo to allow customers to access our Xfinity TV On Demand service complements our commitment to bring any content to any device, at any time."

TiVo has broader deals in effect with other pay-TV operators including DirecTV, Charter Communications, Suddenlink Communications, RCN and the U.K.'s Virgin Media. In those deals, the partners are in various stages of providing the TiVo user interface either on TiVo hardware or running in another vendor's box.

 

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