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TiVo Treads Into T-Commerce With PayPal Pact

Can TiVo turn couch potatoes into shoppers?

Starting this fall, the company will let DVR users click on interactive ads to buy products or services through their PayPal accounts, a solution that will be available to TiVo's cable operator customers.

The concept of letting TV viewers shop with their remote controls has been around since the earliest days of interactive TV -- with limited success to date. Players already engaged in T-commerce include HSN, which provides on-screen interactive TV apps that let viewers buy products featured on the shopping channel through Comcast, Dish Network, Verizon and other operators.

One of TiVo's challenges in entering the T-commerce arena will be its relatively small subscriber base.

As of April 30, TiVo had about 2.5 million subscribers -- 1.1 million retail and 1.4 million through MSOs and DirecTV -- as of April 30. The DVR company lost a net 29,000 retail subscribers in the most recent quarter while netting 235,000 through operators -- a gain entirely attributable to the U.K.'s Virgin Media. Even so, TiVo delivered more than 2 billion interactive ad impressions last year.

TiVo said it will work with advertisers and agency partners to develop PayPal-enabled TiVo ads and "Showcase" campaigns beginning with the fall 2012 TV season.

TiVo also said the T-commerce system will be available to MSO customers, which include Charter Communications, Suddenlink Communications, RCN and Virgin Media.

Products purchased through PayPal will be charged to the TiVo user's PayPal account and shipped to the address the user has registered with PayPal for deliveries. Orders will be fulfilled either by the advertiser or a trusted merchant that accepts PayPal for payment.

PayPal, a subsidiary of eBay, hosts 110 million active accounts in 190 markets and 25 currencies around the world.

"PayPal's expertise in online payments, customer service, and working directly with merchants and sellers makes the entire payment process easy and trustworthy and will create a valuable experience for TiVo users and advertisers," TiVo senior vice president and general manager of content and media sales Tara Maitra said.

Separately, PayPal has an agreement with interactive TV developer FourthWall Media to let cable operators add the electronic payment service to their EBIF applications to sell products or services.