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TiVo Coming to Virgin's Non-DVRs, Too

Jeff Baumgartner
11/27/2009

1:30 PM -- TiVo Inc. (Nasdaq: TIVO)'s on board to be the exclusive middleware and user interface provider for Virgin Media Inc. (Nasdaq: VMED)'s next-gen HD boxes, and not just the models with onboard DVRs -- a first for the DVR pioneer. (See Virgin Presses 'Play' on TiVo.)

TiVo CEO Tom Rogers clarified that during Tuesday afternoon's third-quarter earnings call. "This deal... marks the first time TiVo will be providing the interface, not just for the DVR platforms, but for the traditional next-generation set-top boxes without DVR capability, as well," he explained.

So, where does this leave SeaChange International Inc. (Nasdaq: SEAC), which is supplying its TV Navigator middleware for 3.8 million of Virgin's digital boxes today?

SeaChange, which got into the middleware game in 2005 after putting up $25.5 million for Liberate Technologies' international assets, will still be involved, supplying the centralized backend and management software running inside multiple types of boxes on the Virgin network. This includes the upcoming set-tops that will contain the TiVo application, according to Simon McGrath, the chief marketing officer for SeaChange's U.K.-based operations.

Virgin and SeaChange recently inked a deal that will keep that piece of the relationship going until 2011. "I have absolutely no doubts that that [agreement] will be extended," McGrath said.

Although TiVo has gotten a foothold at Virgin on next-gen boxes (and possibly through some future retail distribution angles), SeaChange still has a strong position at the MSO, most recently striking a deal to provide dynamic advertising insertion. (See Virgin Presses 'Play' for On Demand Ads.)

Plus, SeaChange and TiVo aren't exactly strangers. In March, the companies struck a deal to put cable video-on-demand services on the TiVo HD-DVR platform without tru2way. In that scenario, the Ethernet connection on the TiVo box will serve as the return path and interface with the SeaChange VoD system. (See TiVo Hooks Up With SeaChange and TiVo Gets More Cable-Ready .)

Other tidbits from TiVo's call:

  • Rogers said a new HD-DVR for DirecTV Group Inc. (NYSE: DTV) is "on track" for launch in 2010, once again giving TiVo access to the satellite giant's video base, which today stands at about 18 million. But TiVo's taking a hit from its original relationship with DirecTV. Rogers said a DirecTV billing error caused them to over-report their TiVo subs to TiVo for 18-plus months, resulting in an overpayment. As a result, TiVo had to record a one-time revenue reduction of $1.8 million in the quarter, and a sub reduction of 146,000.

  • As for its ongoing deal with Comcast Corp. (Nasdaq: CMCSA, CMCSK), TiVo expects "another year of development work" porting TiVo onto the MSO's set-tops. Rogers didn't say when TiVo might introduce a more capable tru2way box, but said the work with Comcast keeps TiVo heading in that direction.

  • Rogers said TiVo's rollout with Cox Communications Inc. has moved out of the testing phase, and has reached the "very early stage of deployment" in the MSO's New England region.

  • TiVo needs some of these partnerships to bear fruit, and fast. In the third quarter, the company's MSO/broadcaster sub based eroded by 123,000, with the one-time reporting issue with DirecTV factored in.

    — Jeff Baumgartner, Site Editor, Cable Digital News

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