News

Cox Opens VOD Door to TiVo

8/23/2010 12:01 AM Eastern

Cox Communications will give
customers who own TiVo’s latest digital video
recorders access to its entire video-on-demand
library — but for now, the MSO has put its own
TiVo-based service on the back burner.

Cox expects to enable access to VOD for TiVo
Premiere DVR users in early 2011 across all
major markets, offering up to 15,000 hours of
video. The companies touted it as the first time
a cable operator will integrate its on-demand
service with a third-party retail device.

“This will provide our mutual customers another
choice,” Cox vice president of product development
Steve Necessary said. “It does fully
acknowledge the fact that consumers are consuming
broadband content on TV … We think
it’s a highly valuable combination.”

Today, relatively few Cox customers use
TiVo DVRs. The operator, the third-largest
in the U.S., serves more than 6 million customers
— but it had only 45,129 CableCards
deployed for use in TiVos and other devices
as of May 31, 2010, according to the National
Cable & Telecommunications Association’s
most recent quarterly CableCard report.

Meanwhile, TiVo continues to lose customers
by the thousands, with 2.51 million cumulative
subscriptions as of April 30, 2010, down
22% from 3.20 million a year earlier.

As part of the new agreement, Cox will support
TiVo Premiere DVRs purchased by subscribers
at retail and online outlets as an
optional set-top. The MSO will provide free installation
— which normally costs up to $75
— including hooking it up to broadband and
troubleshooting CableCard issues. In addition,
Cox will promote the DVRs via its website, crosschannel
advertising and via direct marketing to
video and high-speed Internet subscribers.

“Until now, cable subscribers had to
choose which kind of content on the ondemand
side they wanted: the cable operator’s
VOD or TiVo’s broadband content,”
TiVo president and CEO Tom Rogers said.
“Now they can have it all.”

For more than two years, Cox has been in
the midst a project to bring TiVo software
to Motorola DVRs, following Comcast’s deployment
of the same confi guration in New
England. But Rogers said the priority for Cox
and TiVo is now to enable VOD for Premiere
DVRs: “The previous work we were doing was
much heavier lifting… This represents a relatively
quick time to market.”

Cox did consider offering customers a
lease option for the TiVo Premiere hardware,
according to Necessary. RCN currently
does that in all of its markets, and Suddenlink
Communications plans to do the same
starting later this year.

However, Cox didn’t want to introduce
set-tops that had inconsistent capabilities,
Necessary said. For example, TiVos provide
access to broadband-delivered content,
while Cox’s boxes currently do not.

“At the end of the day we felt the best option
and alternative was simply to support
the retail product as is,” he said.

Cox has an incentive to encourage more customers
buy their own set-tops, as that reduces
capital spending. The TiVo Premiere DVR with
320 Gigabytes of storage is $300, while the 1-
Terabyte “XL” version runs $500.

The companies would not disclose whether
Cox would receive a cut of the monthly TiVo
subscription fee of $12.95. The MSO charges customers
$2 per month for each CableCard.

March