Best Buy + TiVo does not equal HDTVs with built-in DVRs

The news that Best Buy and TiVo are teaming up to share technology and hopefully pump up each other's sales has led some to conclude that new HDTVs with digital video recording capability are in the offing.

That's highly unlikely.

TiVo, the inventor of the DVR market that has trouble making any profit on it, and Best Buy, the giant of electronics retail, announced Thursday a new partnership. Best Buy will push TiVo DVRs in its stores, and TiVo will create a special set-top box that Best Buy can sell specifically to push its own advertising at TiVo customers.

We're not likely to see Insignia TVs with TiVo inside.

(Credit: CNET)

Then there's this line in the press release, which appears to be causing some confusion: "TiVo intends to work with Best Buy's Exclusive Brands group (e.g., Insignia, Dynex, etc.) to explore integration of its user interface, search, and other TiVo benefits to help further grow that consumer electronics line."

Some are interpreting that to mean TiVo will drop its DVRs into Insignia and Dynex TVs. But that's not what it says. The release carefully words that section for a reason. In an interview, TiVo Senior Vice President of Marketing and Sales Joe Miller downplayed that part of the deal concerning TVs, calling it "just one aspect." What TiVo will share with Best Buy-branded TVs is its interface, search function, and Internet-delivered content, like on-demand movies from Amazon and Netflix, and YouTube.

But as far as putting TiVo DVRs inside Best Buy's TVs, it's clearly not a priority for TiVo. "We're not ruling it out," Miller said. "But what we're saying here is, what does it take to make the best possible TV experience."

They're not ruling it out, but they're not promising it either. And it's likely because it's not a wise path to follow. TVs with built-in DVRs aren't exactly a new idea. At CES 2005, the Humax with TiVo inside was announced but never made it to market. The LG 42LB1DR, which had a DVR but not TiVo-branded, actually made it to store shelves, but it had a huge caveat: it could only record over-the-air and "clear cable" (QAM) channels or it needed a cumbersome CableCard hook-up. With the former configuration, premium channels such as Comedy Central and HBO weren't available, with the latter you lost access to on-demand programming (and, often, the ability to record one show while watching another). That meant consumers were paying a big premium (versus the same TVs with no built-in DVR), despite getting a hobbled recording experience. Not surprisingly, demand for such DVR-enabled TVs was nil, and they've largely disappeared from the market.

What this is about is increasing sales for both. TiVo has been losing subscribers, and consumer electronics purchases have taken a plunge along with the economy. Miller says the main focus of the deal for both is to sell more TiVos.

"Their goal is to drive as many TiVo subscriptions as they can," he said.

CNET's John Falcone contributed to this story.