June 4, 2004 11:32 AM PDT

DirecTV exec quits TiVo board

DirecTV's vice chairman has stepped down from TiVo's board of directors--and the satellite TV company has no plans to replace him with another representative.

TiVo, a digital video recorder (DVR) company, said DirecTV Vice Chairman Eddy Hartenstein resigned to spend more time at DirecTV, which has gone through some management changes following its acquisition by News Corp.

Hartenstein began serving on TiVo's board in October 2003. DirecTV will not be nominating another executive to fill his spot on TiVo's board, according to Bob Marsocci, vice president of communications at DirecTV.

Since News Corp.'s acquisition of DirecTV, there has been speculation surrounding the solidity of the relationship between TiVo and DirecTV. TiVo executives have acknowledged in the past that DirecTV hasn't endorsed its latest features as quickly as the DVR maker would have liked.

DirecTV invested in TiVo in April 1999 with a stake that at the time was in excess of 10 percent. The company also gained a position on TiVo's board at that time.

Analysts suspect that another company may be brought in to further fulfill News Corp.'s DVR needs.

"We are aware of the speculation...This does not signify a change in our relationship with TiVo," Marsocci said. "DirecTV TiVo subscribers are our most loyal customers and tend to spend the most money" among DirecTV's subscriber base.

The average monthly churn rate, or loss of customers, of DirecTV subscribers is about 1.4 percent per month, according to Marsocci. The churn rate of DirecTV subscribers who are signed up for the TiVo DVR service is 0.5 percent per month. There are about a million DirecTV subscribers signed up for the TiVo service.

DirecTV is in the process of increasing the number of DirecTV high-definition television TiVo boxes shipped to retail stores. The company remains on track to release a lower-cost DVR box with TiVo.

A TiVo representative declined to comment.

TiVo in late May reported strong subscriber growth, adding about 264,000 subscribers in its first quarter. The majority of those came from DirecTV customers. There are about 1.6 million TiVo subscribers in total.

Current board members include TiVo executives Michael Ramsay and David Courtney, Coca-Cola executive Chuck Fruit, Discovery Communications chief John S. Hendricks, Virtual chief Randy Komisar, New Enterprise Associates partner Mark W. Perry, TRget Media Chairman Tom Rogers, OMD Worldwide chief Joe Uv, Redpoint Ventures director Geoffrey Y. Yang, and NBC Cable President David Zaslav.

 

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