Mid-sized cable operator RCN and digital-video recorder (DVR) supplier TiVo announced that RCN will make TiVo its primary DVR platform and will begin offering customers a co-branded "TiVo DVR from RCN" in early 2010.
The TiVo DVR will integrate with RCN's video-on-demand library and also offer broadband content from services such as Amazon Video On Demand and Picasa Web Albums. It will also support standard TiVo features such as SeasonPass automatic recordings and WishList searches.
"The TiVo DVR from RCN is a truly innovative convergence of video and broadband programming controlled through a single user interface that is simple, intuitive, and dramatically different from that of other DVRs," said RCN CEO Peter Aquino in a statement. "We are always looking for ways to improve our customers' experience, and TiVo brings us the best feature set at a very compelling value while also allowing us to deploy these new services faster than our competitors because we can leverage our current infrastructure."
While Comcast and Cox have sought to integrate TiVo's DVR software into their set-tops, and satellite operator DirecTV first offered a TiVo set-top in 2000, RCN would be the first MSO to make TiVo its flagship set-top. RCN, which currently leases Motorola HD DVRs to its subscribers, is facing new video competition from Time Warner Cable and Verizon in markets like New York City. Its other service areas include Washington, D.C., Philadelphia, Lehigh Valley, Pa., Boston and Chicago.
The RCN set-tops will be based on TiVo’s retail boxes and won’t require the complex software integration that TiVo is performing for Comcast and Cox in order to make its software run on Motorola and Cisco set-tops, says Naveen Chopra, VP of corporate development for TiVo, who describes the Comcast deployment as “still in its very early stages.” The RCN DVRs will probably have similar storage characteristics to TiVo’s current HD boxes, which have 320 gigabytes, enough for about 30 hours of HD video.
The RCN boxes will pull “over-the-top” broadband content in the same way as retail boxes, too, by connecting to a subscribers’ home network. The RCN boxes will also use a subscribers’ home network to support TiVo’s version of “Whole-home DVR” functionality, which allows content from multiple TiVo DVRs to be shared across multiple TVs.
They won’t be using Multimedia over Coax Alliance (MoCA) networking technology to send content from the TiVo DVRs to thin-client set-tops in other parts of the home, which is the multi-room DVR architecture currently supported by Motorola and Cisco and used by operators like Verizon FiOS. Chopra says that TiVo already has a lot of successful experience in using subscribers’ home networks, either wired or wireless, to stream HD video around a home.
While he won’t disclose the financial terms of the RCN deal, he says it will be similar in structure to arrangements TiVo has struck with other multichannel operators such as DirecTV. In those deals, TiVo gets a per-subscriber fee and advertising placements within the TiVo user interface, as well as the right to pull set-top data on an anonymous basis for its measurement services. RCN has suggested it would charge customers a premium of $3-$5 per month for the new TiVo DVRs.
“For the operator, the real value here is acquiring and retaining a subscriber,” says Chopra. “Now they’ve got Verizon in there [as competition], and all sorts of online options.”
Chopra wouldn’t comment directly on whether the latest development in the ongoing litigation between TiVo and EchoStar, in which the U.S. Patent Office has issued a preliminary injunction against some TiVo patents, would have any effect on the company’s new deal with RCN. He does say that multichannel operators continue to be interested in forming distribution relationships with TiVo.
About two million of TiVo’s roughly 3.5 million subscribers today are DirecTV subscribers, dating back to the companies’ original 2000 agreement which lapsed in 2007. Last year, TiVo agreed to build a new MPEG-4 compliant set-top DVR for DirecTV, which it plans to deliver next year.
“Unlike the previous generation, where we took our hardware and turned it into a DirecTV box, for the new model we’re taking a DirecTV box and putting our software in,” says Chopra. “Because it’s a new satellite box, it’s not nearly as complex as the issues we’re working through with Comcast. But it’s still a significant project.”
