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RCN Makes TiVo Its Dominant DVR

RCN Corp. said it will start offering TiVo Inc. (Nasdaq: TIVO) as its "primary" DVR platform next year, offering a device that will hook into the cabler's legacy video-on-demand (VoD) system and take advantage of the box's high-speed Internet port to feed in Web-sourced video from Amazon.com Inc. (Nasdaq: AMZN) and other content partners. (See RCN Selects TiVo DVR.) RCN said it will begin marketing the co-branded, "uniquely configured" TiVo box in early 2010, giving the company a new weapon to wield against competitors such as Comcast Corp. (Nasdaq: CMCSA, CMCSK), Time Warner Cable Inc. (NYSE: TWC), and Verizon Communications Inc. (NYSE: VZ), as well as satellite TV foes, in systems serving Philadelphia, New York, Boston, Chicago, and Washington, D.C. Comcast offers a version of TiVo ported to Motorola Inc. (NYSE: MOT) digital set-tops, but deployment has been limited to its Boston and New England markets. However, Comcast and TiVo have hinted that a launch in Chicago is forthcoming. Cox Communications Inc. is also on board to offer the TiVo port, starting in its New England properties. (See Cox Tees Up TiVo Test Bed .) Comcast also announced intentions to offer TiVo as a "primary DVR option" in a yet-to-be announced tru2way market, but has not pinpointed a launch date. If Comcast opts to go wider with that strategy, RCN's use of the TiVo DVR as a competitive differentiator may be short-lived. (See Chi-Town Bound?) An RCN spokesman said the MSO is still finalizing pricing and packaging for the TiVo offering. He added that RCN will continue to offer Motorola DVRs "on a limited basis…[but] TiVo will be RCN's recommended DVR of choice.” TiVo, meanwhile, has yet to say which DVR model RCN will use for the rollout next year. "We are uniquely configuring TiVo hardware and software capabilities to fit the needs of RCN and its customers," a TiVo official said. Although RCN's version of the TiVo box will go a step further than the current Comcast/TiVo port by providing access to "over-the-top" video from the Web and supporting "TiVoToGo" (an app that allows users to transfer recorded shows to laptops and smartphones), the device will also hook into RCN's existing cable VoD system, which uses backoffice software and servers from SeaChange International Inc. (Nasdaq: SEAC). Much of that technical groundwork is already done. Earlier this year, SeaChange and TiVo forged a deal that would allow one-way TiVo DVRs with CableCARD slots to run cable VoD applications without supporting the CableLabs -specified tru2way platform. Instead, the Internet connection on the TiVo box will serve as the return path and interface with the SeaChange VoD system. Cable VoD titles, meanwhile, are tied into the TiVo user interface (and search engine) using the DVR's Java-based HME (Home Media Engine), a component that TiVo already uses today for access to services such as YouTube Inc. and Flickr. (See TiVo, Comcast Discount Targets HD Subs and TiVo Gets More Cable-Ready .) TiVo, which has yet to introduce a tru2way box of its own, is also using the SeaChange VoD connection to reach out to Tier 2 and Tier 3 MSOs through a recently inked distribution pact with Evolution Broadband LLC . Comporium Communications , the first cable operator to take advantage of that deal, is already starting to market HD-capable TiVo boxes to subs in Charlotte, N.C. Oh, yeah... earnings
RCN also posted second-quarter net loss of $9 million, narrowed from a loss of $17 million in the year-ago period, on revenues of $192 million, up 4 percent. (See RCN Posts Q2 .) The operator said capital expenditures reached $25 million in the second quarter, down from $32 million a year ago, and $26 million in the previous quarter. RCN ended the quarter with 368,000 video subs, up 5,000 from a year ago. — Jeff Baumgartner, Site Editor, Cable Digital News

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