TiVo CEO: Subscribers will come
A couple of years ago, if you had suggested TiVo and DirecTV would ever kiss and make up — after DirecTV dumped TiVo in favor of DVRs by NDS (then a cousin in the News Corp Family) — you might have said it was as likely as “90210” coming back to TV.
Well one day after the new “90210” premiered on the WB network, TiVo and DirecTV said they are working on a new HD TV set-top box. The agreement puts TiVo in a position to turn a bigger portion of DirecTV’s 16+ million customers into TiVo subscribers, in a deal that TiVo says will reap more in fees than previous agreements.
Reuters spoke to TiVo CEO Tom Rogers about the deal.
Reuters: This is kind of like getting back together with your first love.
Rogers: I’ve been saying for a long time that with DirecTV’s ownership by Liberty Media, it created a new atmosphere and a new environment. I think the management of DirecTV has always been supportive of TiVo and believes that we can put together a very exciting offering.
Reuters: DirecTV is still going to offer generic DVRs to its subs?
Rogers: We are comfortable with that. We recognize that generic DVRs will continue to exist. The biggest contributors to confusion between what is Tivo and what is “DVR” has been mass distributors themselves and obviously the more deals we do the more people have interest to make sure that there is a DVR offering and then something very different that is TiVo.
Reuters: DirecTV TiVo users don’t pay fees to TiVo directly. Is this deal lucrative for you?
Rogers: It was very a successful arrangement for us. There is a lot of financial upside.
Reuters: You are still in court with EchoStar, the other satellite provider. Do you see a time when you will make a similar deal with them?
Rogers: We kind of have a three-pronged strategy: Our go it alone route, our join ’em route, which is what you could say this is, and our fight ’em route, which is what EchoStar is. We are getting to the end of the enforcement stage in our fight with EchoStar. Tomorrow we are back in front of the judge for a hearing (related to an injunction and damages).
Reuters: Is TiVo close to the point when that kind of fighting is over?
Rogers: Three years ago I think the view of TiVo is that it had been totally commoditized, that other DVRs were out there and that TiVo, other than a brand name, didn’t have a meaningful distinction. Over the past year we have regained that mantle of innovation, of pioneer. We continue to lead the way on features and giving people a sense of controlling their own destiny on television consumption. We have a lot of work to do but I think we have made enormous progress.
Reuters: But your subscriber gains have still been flat lately. When is there an upturn?
Rogers: When Comcast begins to kick into full gear, and as the DirecTV product becomes available — we have been dialing back our marketing expense on the standalone front…we think all that will kick in to meaningful subscriber growth.