News : Tivo, Netflix partner on Web streaming

By Sue Zeidler

LOS ANGELES (Reuters) - Netflix Inc said on Wednesday it reached a deal with TiVo Inc to further deliver on its goal of offering Netflix's Web streaming service directly to televisions through many devices.

Terms of the deal were not disclosed, but it calls for Netflix to provide subscribers of its online DVD rental service and many of the 800,000 broadband-connected Tivo subscribers with the ability to stream movies and TV episodes from Netflix's "Watch Instantly" service to TVs free of charge.

TiVo, maker of the popular digital video recorder, and Netflix said late on Wednesday they were initiating a test of the new capability in several thousand U.S. households and expect it will be broadly available in early December.

Netflix's "Watch Instantly" Web streaming service, with a library of more than 12,000 movies and TV episodes, is offered free to its more than 8 million subscribers.

The company is moving aggressively to extend that streaming service from the PC to TV while facing challenges from the likes of Apple Inc and Amazon.com Inc.

Netflix recently struck a deal for Samsung Electronics Co Ltd's Blu-ray DVD devices to play video streamed from Netflix and a similar deal with Blu-ray DVD player maker LG Electronics. It also has deals to stream movies to Microsoft Corp's Xbox 360 videogame consoles and to a $100 set-top box made by Roku Inc.

In recent years, TiVo has developed add-on features to help differentiate its DVRs from that of cable and satellite TV providers that often offer basic DVRs at cheaper prices.

It allows users to rent videos from Amazon and watch them on TVs, and this past summer began enabling some customers to watch online videos from Google Inc's YouTube on their televisions.

"The YouTube service on Tivo is extremely popular," said Tara Maitra, vice president and general manager of content services at TiVO, who said over 65 percent of its broadband-connected subscribers were taking advantage of the broadband features.

"I think everyone's trying to figure out the right business model, and they want to get their content on as many platforms as available," she said.

(Reporting by Sue Zeidler)

News : TiVo, DirecTV to develop new DVR

By Franklin Paul

NEW YORK (Reuters) - TiVo Inc (TIVO.O: Quote, Profile, Research, Stock Buzz) is developing a new digital video recorder for satellite TV provider DirecTV (DTV.O: Quote, Profile, Research, Stock Buzz), rekindling a strained relationship and potentially opening the door to boosting the number of its subscribers.

TiVo shares climbed more than 2 percent on Wednesday after the companies said that they had extended their current deal and added the development, marketing and distribution of a new high-definition DirecTV DVR featuring TiVo service. The product's launch is expected in the second half of 2009.

Terms of the deal, which also includes an extension of intellectual property arrangements, were not disclosed. But in a federal filing, TiVo said DirecTV will pay a substantially higher monthly fee for households using the new high definition DirecTV DVRs than it does for previously deployed models.

In addition, fees paid by DirecTV are subject to monthly minimums that escalate during the term of the pact starting in 2010 and those minimum payments are "substantially higher" than in the prior agreement, TiVo said.

DirecTV was once the biggest source of new subscribers to TiVo's television recording service. But their relationship soured in 2005 when DirecTV, the top U.S. satellite TV broadcaster, said it would no longer market TiVo's set-top boxes and would use its own system made by NDS Group Plc (NNDS.O: Quote, Profile, Research, Stock Buzz).

However, the companies did not sever their ties. In 2006, they extended their service and support agreement for three years, allowing customers to continue to receive maintenance and support for their TiVos.

Many of the satellite operator's more than 16 million users still own TiVo set-top boxes, but their numbers have been dwindling.

At the end of the second quarter, TiVo had a total of 3.6 million subscribers. Of that 1.7 million were "TiVo-owned" -- users who pay a monthly fee directly to the company.

TiVo will work with DirecTV to make a DVR product for customers with high-speed Internet service that will support both companies' latest features.

"This new deal should minimize the DTV attrition headwind TiVo has felt as DTV's subs have moved to HD (where there is no TiVo offering today)," said Citigroup analyst Tony Wible in a note to clients. "Overall, the new deal should help protect the roughly $22 million of high margin revenue TiVo receives from DirecTV today."

The new agreement runs through February 2015, with DirecTV having the right to extend it until February 2018, TiVo said.

DirecTV will continue to develop and offer its own set-top boxes for both new and existing customers.

Shares of TiVo rose 32 cents to $8.83 in morning trade on the Nasdaq on Wednesday. DirecTV shares edged up 17 cents to $27.79.

(Reporting by Franklin Paul; Editing by Lisa Von Ahn and Steve Orlofsky)