DirecTV Deals for ReplayTV Assets

But why? Maybe it portends an in-house DVR strategy for satellite TV giant UPDATED 4:50 PM

Jeff Baumgartner, Senior Editor

December 13, 2007

3 Min Read
DirecTV Deals for ReplayTV Assets

DirecTV Group Inc. (NYSE: DTV) sealed a deal today to purchase the assets of digital video recorder (DVR) pioneer ReplayTV from D&M Holdings Inc. of Japan for an undisclosed sum, but the satellite giant has been mum so far about how the move will fit into any larger strategy. (See DirecTV Picks Up ReplayTV.)

What's puzzling is that DirecTV already has a DVR. The company first partnered with TiVo Inc. (Nasdaq: TIVO) for the feature and still supports TiVo-equipped satellite boxes. Its new DVRs use software from News Corp. (NYSE: NWS) corporate cousin NDS Ltd. , and DirecTV recently extended a conditional access contract with NDS that's good through June 2013. (See DirecTV, NDS Extend Deal.)

A canned response from DirecTV didn't explain much.

"The acquisition of Replay TV's assets will enable us to explore new services as well as the potential of Replay's IP technology," a company spokesman said in an emailed comment. DirecTV, he added, has made "no decisions… concerning the integration of Replay technology with our existing platform."

Even without a specific outline from DirecTV, plenty of guesses are making the rounds.

Maybe DirecTV is looking to reset an internally run DVR technology and service strategy, as ownership of the satellite company shifts from Rupert Murdoch's News Corp. to John Malone's Liberty Media Corp. (NYSE: LMC), suggests Bruce Leichtman, president of Leichtman Research Group Inc. (LRG) .

"Maybe there's a way to keep [a DVR strategy] in-house to some degree with the ReplayTV assets," Leichtman says.

Then again, DirecTV might be seeking some legal shielding, considering rival EchoStar Satellite LLC "appears to be losing a legal battle with DVR provider TiVo Inc. over patent issues," writes analyst Stewart Schley of One Touch Intelligence in a blog entry.

The ReplayTV purchase may also give DirecTV additional leverage should it decide to negotiate a new deal with TiVo.

"That early relationship with TiVo was a good one," Leichtman says, noting that DirecTV probably moved to NDS to avoid paying higher license fees to TiVo.

D&M chairman and CEO Eric Evans said in a statement that the ReplayTV "asset and business was profitable" but that the sale to DirecTV "makes the most sense for this business, its employees, and us."

D&M said it will continue to honor its ReplayTV service contracts "for the foreseeable future," while DirecTV will take over most of ReplayTV's assets and its brand. D&M did not disclose the number of ReplayTV subscribers.

The DirecTV deal marks the latest change of hands for ReplayTV's assets. SonicBlue bought ReplayTV in 2001 but later filed for bankruptcy and sold its assets, including the ReplayTV components, to D&M in April 2003 for $36.2 million.

In June 2003, ReplayTV succumbed to pressures from studios and other copyright holders, agreeing to remove the "Send Show" and auto-ad-skip features from its 5500 DVR model. Send Show let ReplayTV users share recorded programs over the Internet, and cable programmers, particularly premium services, cried foul over the practice.

As for TiVo, it's been beefing up its cable strategy in the wake of its altered relationship with DirecTV. TiVo has signed deals with Comcast Corp. (Nasdaq: CMCSA, CMCSK) and Cox Communications Inc. , though deployments with the former are just getting off the ground. (See TiVo Set-Tops Trickle Out .)

The cable industry is appeasing TiVo further with a refined version of the OpenCable Platform. This would let TiVo retail models with CableCARD slots run in two modes, including one that would preserve the TiVo user interface and reduce conflicts with local operators' applications and guides.

Cable is also developing a "tuning resolver" to let one-way TiVo DVRs with CableCARDs access programs in an operator's "switched" tier. (See TiVo à la Mode , CableLabs Spec Brings SDV to the Masses, and 'Tuning Resolver' Faces IP Hurdles .)

— Jeff Baumgartner, Site Editor, Cable Digital News

About the Author(s)

Jeff Baumgartner

Senior Editor, Light Reading

Jeff Baumgartner is a Senior Editor for Light Reading and is responsible for the day-to-day news coverage and analysis of the cable and video sectors. Follow him on X and LinkedIn.

Baumgartner also served as Site Editor for Light Reading Cable from 2007-2013. In between his two stints at Light Reading, he led tech coverage for Multichannel News and was a regular contributor to Broadcasting + Cable. Baumgartner was named to the 2018 class of the Cable TV Pioneers.

Subscribe and receive the latest news from the industry.
Join 62,000+ members. Yes it's completely free.

You May Also Like