LAS VEGAS - TiVo Inc. and Comcast Corp. on Monday unveiled the long-awaited fruits of an agreement to work together: A cable box that runs TiVo's digital-video-recorder software.
The collaboration between the largest U.S. cable operator and TiVo was announced to great fanfare in March 2005 and has been considered one of the most significant deals for the DVR pioneer. TiVo has been facing tough competition against a growing number of less expensive DVRs from cable and satellite TV operators, including Comcast.
Soon, for an additional fee, Comcast subscribers will be able to add TiVo DVR features to their existing set-top boxes without a visit from a technician, Comcast said. Details of a launch plan were unclear, but TiVo officials said a rollout to one cable market is expected in the spring and will expand to more markets later.
The companies said they have been testing the service since late 2006.
Comcast also did not disclose how much more the TiVo software would cost its customers except to say it would be a "modest" amount. Comcast customers currently pay about $10 a month for a basic DVR service on top of their regular TV service charge.
For TiVo, a company that has yet to reach profitability and spends heavily in marketing to gain new subscribers, the upcoming Comcast launch represents a "major milestone," CEO Tom Rogers said in an interview.
With it, TiVo taps into Comcast's vast customer base and marketing machinery. TiVo doesn't have to pay for building a set-top-box either. Instead, TiVo will receive a portion of the monthly subscriber fee, roughly $1, Rogers said.
"That's pure margin for us," he said.
In addition, the hope is that with more TiVo users and more eyeballs - TiVo had 4.4 million subscribers as of the quarter ending Oct. 31 - the company will be able to boost revenues from its advertising services.
The Comcast deal was TiVo's first hookup with a cable operator.
"I think an awful lot of the cable industry is going to be watching this, in terms of hopefully putting their own shoulders behind it," Rogers said.The two companies plan to demonstrate the new TiVo-based service at the International Consumer Electronics Show this week.
Digital video recorders let TV watchers search for and easily record their favorite shows onto a hard drive without the hassles of video tapes. It also lets users pause live TV, do instant replays and zip past commercials.
TiVo's service is known for its slick, easy-to-use interface and advanced features such as suggesting programs a user might enjoy, the ability to transfer TiVo recordings for viewing on PCs and portable devices, and the ability to schedule last-minute recordings via the Web.
It has been challenging for the company, however, to differentiate itself.
Shares of TiVo gained 16 cents, or 2.94 percent, to close at $5.61, while Comcast's stock slipped 8 cents to finish at $42.47, both on the Nasdaq Stock Market.