November 14, 2006 9:26 AM PST

TiVo taps the Internet for content

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TiVo enthusiasts will soon be able to use their devices to watch Internet video content on their TV set, the company announced Tuesday.

The company's expansion as a broadband video portal, as well as a manufacturer and television interface provider, includes three new software features and several content partnership agreements.

"These are features that are really changing what the TiVo service is," said Tara Maitra, general manager of programming at TiVo. "It's a creation that will make TiVo different from generic digital video recorders and opens up the content beyond what's available on digital cable and satellite."

Owners of TiVo's DVRs will be able to share home videos with other users. Through a partnership with One True Media, an online video and photo service, TiVo users can upload home video to the Web and share a channel code with other TiVo owners.

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TiVo also announced Tuesday that it has expanded its TiVoCast offerings. TiVoCast is a service that offers broadband video content from companies via the TiVo box. TiVo said it signed a deal with CBS Interactive to provide content from CBS.com, CBSNews.com, CBS SportsLine.com and Innertube (CBS' broadband channel).

TiVo also signed deals for TiVoCast content with Reuters; Forbes; dLife, a health content network; Plum TV, a lifestyle network featuring vacation hot spots; and Nano Network, an independent film and theater outlet.

In addition to the One True Media partnership and the TiVoCast offerings, the company announced a broadband video service for watching Web videos on TV. That broadband video service requires TiVo Desktop Plus 2.4, which will be free for version 2.3 owners and $24.95 for TiVo subscribers. TiVo Desktop Plus 2.4 converts videos in QuickTime, WMV and MPEG-4 formats into a TV-viewable format and enables them to be imported to the TiVo box. The software must be downloaded to a PC running Windows XP that is connected to the TiVo box either directly or via a home network.

"The real question is whether this (addition of Internet video access) is going to sell more TiVo boxes, and I think the answer to that is no," said Josh Bernoff, a Forrester Research analyst.

"There is no way for TiVo to monitor the content in this situation, because it's the TiVo consumer who is downloading the content to their PC and then offloading it to the TiVo device."
--Tara Maitra, general manager of programming, TiVo

"Internet video looks pretty crappy when you put it on a big TV set, and transcoding doesn't solve that," Bernoff said. "I am a lot more encouraged that (TiVo is) making relationships with content owners."

But TiVo owners may have the opportunity to download more than just crappy movies. Besides the technical parameters of the three formats the TiVo software can convert--QuickTime, WMV or MPEG-4 files free of digital rights management (DRM) protection--TiVo users will have complete control over the Web video content they choose to upload to TiVo via the Desktop Plus 2.4 software. That means that things like copyright movies that pirates manage to upload to peer-to-peer such as BitTorrent or social networks such as YouTube could potentially be illegally downloaded to a PC and then uploaded to a TiVo box.

TiVo does not plan to police the content that millions of device owners download to their own PC, according to Maitra.

"TiVo, basically, will be a receiving device, in the sense that the content that a subscriber pulls from the Web needs to be in a format that is not DRM-protected," Maitra said. "There is no way for TiVo to monitor the content in this situation, because it's the TiVo consumer who is downloading the content to their PC and then offloading it to the TiVo device."

TiVo has been struggling to gain new subscribers. In March, the company signed a partnership with cable provider Comcast to provide software to its DVR boxes. The deal will give TiVo access to Comcast's 23.3 million cable subscribers, though the product has been slow in reaching the market.

In rolling out the new video features, TiVo plans to keep the goodies to itself. TiVoCast, as well as the Web-to-Internet broadband video service and the One True Media home video-sharing feature, at this point, are going to be "strictly available through the TiVo standalone service," Maitra said.

As companions to all the new content available, TiVo said it will be offering a new search feature in 2007 for finding and recording content across "broadcast, cable and broadband content sources." An additional deal with International Creative Management will also offer TiVo owners new TV show and film recommendations from famous Hollywood actors and directors.

Adding new features is usually a tool used to retain existing customers, Bernoff said. While retention is a problem for cable providers afraid of losing customers to satellite television, customer retention has not been a problem for TiVo. TiVo's challenge, Bernoff said, is to acquire new customers.

"You are about to see, starting in 2007, announcements from a bunch of new Internet-connected DVRs and, of course, TiVo's competition is and continues to be from the cable and satellite boxes available for free across the United States."

DVR owners are mainly interested in three things from their DVR: "to skip commercials easily, pause live TV, and record and view all episodes of a given show," Bernoff said, referring to a Forrester Research survey.

"All the new features...may make the TiVo box a whole lot more interesting to the TiVo owner, but it's very obscure stuff to be selling to a potential customer," Bernoff said. "They're not saying, 'Well, if only I could get access to Internet video, then I'd buy a TiVo box.'"

"I know we are hearing of DVRs with Internet video, but I have not heard of any service that is going to provide an all-encompassing service, combined with what has already been tested and proven as one of the easiest-to-use interfaces," Maitra said. "Having it all available in one location is going to be one differentiating factor. And it's all going to be made available in the easy-to-use TiVo interface."

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TiVo Inc., broadband video, CBS Broadcasting Inc., Internet video, subscriber

 

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