Tivo hearing today?

[Greg Bimson]

An agreement is a legally binding contract, D* cannot just drop it. But D* also does not have to promote such arrangement. Apparently the agreement did not call for such effort on the D* part to promote the deal, because D* is fast in dropping the existing DirecTiVo subs.

We don't know the terms of the agreement. A legally binding contract could have walk-away terms, so in that case it could be dropped.

And this agreement has only been since 3 September. We don't know how many subs TiVo has lost since this agreement, as it is now just over six weeks old. And this agreement is to continue on the relationship with services for the DirecTV/TiVo DVR's, as well as developing a new MPEG4 DVR. So of course DirecTV isn't pressing the matter.

I'm guessing DirecTV has seen higher churn with their in-house DVR, so they've decided to continue on with the TiVo relationship.

 

[jacmyoung]

We don't know the terms of the agreement. A legally binding contract could have walk-away terms, so in that case it could be dropped.

And this agreement has only been since 3 September. We don't know how many subs TiVo has lost since this agreement, as it is now just over six weeks old. And this agreement is to continue on the relationship with services for the DirecTV/TiVo DVR's, as well as developing a new MPEG4 DVR. So of course DirecTV isn't pressing the matter.

I'm guessing DirecTV has seen higher churn with their in-house DVR, so they've decided to continue on with the TiVo relationship.

Of course I was talking about the old agreement, which was not supposed to expire till next year I think.

You can guess all you want, the fact is D* dropped over 580,000 DirecTiVo subs in the last FY, and is not selling much new DirecTiVo DVRs at all, everyone I read signing on to D* this year was getting D*'s own brand of DVRs.

D*'s churn has been down consistently this year, and one of the reasons was their own advanced DVRs people have commitment on, not DirecTivo DVRs, because DirecTiVo accounts are still dropping like flies, the TiVo's FY reports admitted that fact. TiVo's total sub count dropped from 4.4 million at the begining of 07 to 3.6 million at the mid of 08, mostly due to the drop of the DirecTiVo subs.

My guess is the timing of this new agreement is a D*'s jab at E*, because in this new agreement D* agreed to pay TiVo a higher fee, but not until the end of 09, when their new MPEG4 DirecTiVo DVRs are planned. But by signing this agreement right at the time the court is to determine the additional damages E* must pay TiVo during the stay of the injunction between 06 and 07, it gives TiVo some ammo to try to convince the court the rate should be higher than what the jury granted back in 06. Anything D* can do to put E* in a disadvantage is good for D* of course.

The catch is D* does not have to pay the higher rate until the new MPEG4 DirecTiVo DVRs are out, which according to the agreement will be the end of 09, but can easily be pushed back, or not even promoted much to make any difference at all.

If you do not believe me, just look at the Comast TiVo deal, Comcast supposed to have rolled out their TiVo DVRs over a year ago, have we heard much lately? They are still saying soon, and they have been saying so for a year now.

 

[harshness]

Not only that, DirecTV can drop their arrangement with Tivo at any time. There's a reason they bought ReplayTV. Now that they have Replay's patents, Tivo couldn't do sh*t to them anyway.

This is mostly (if not entirely) wrong.

Replay technologies aren't litigation free.

 

[Greg Bimson]

You can guess all you want, the fact is D* dropped over 580,000 DirecTiVo subs in the last FY, and is not selling much new DirecTiVo DVRs at all, everyone I read signing on to D* this year was getting D*'s own brand of DVRs.

You are correct. Until this agreement was signed, one cannot purchase a "new DirecTiVo DVR", as they are extremely hard to find.

However, losing subscribers that generate about a buck a month for TiVo does not translate to bad business. Losing subscribers that you do not own and that you receive only a fraction of recurring revenues only translates into a loss of market share.

Case it point: TiVo loses 580K subs from DirecTV in the course of a year, and on average that is about $30 million in lost revenue over the course of the past the year (assuming flatline quarter-over-quarter losses). Dish Network has a net loss of 25K subs in the course of a quarter, and that translates to $20 million in lost revenue over the course of the upcoming year. If some of those 25K subs are enticed to sign with Dish Network again, then add subscriber acquisition costs, and the costs aggregate more than the $20 million I mentioned.

The trending for new subscribers is still downward for both companies. Using myself as an example, I replaced one of my three DirecTV/TiVo units with a DirecTV DVR. TiVo loses out on a buck a month from the unit I retired, but they still receive two bucks for the two units I have active.

The question for TiVo is whether or not they are able to start marketing DirecTV with TiVo receivers soon, before the MPEG4 version is available. I'd think TiVo could restart the old R10's, the DirecTV with TiVo standard definition receivers. But that doesn't even truly matter, as TiVo I don't believe is trying to increase subsidies to signup new customers.

I have a strange feeling that the TiVo MPEG4 HD DVR for DirecTV will be unsubsidized. The recurring monthly fees may be fine, but I think the hardware price for this may be a bit higher than normal.

 

[Tyralak]

This is mostly (if not entirely) wrong.

Replay technologies aren't litigation free.

No, but if you'll research it a bit, you'll find that Replay and Tivo sued each other years ago, and settled on an agreement not to sue each other. Due mostly to the fact that they infringed on each other's patents. As Greg mentioned, Tivo is infringing on the play/ff/rew features that Replay patented. So unless Tivo wants to find themselves on the other end of a lawsuit, they won't try anything.

 

[iwc5893]

No, but if you'll research it a bit, you'll find that Replay and Tivo sued each other years ago, and settled on an agreement not to sue each other. Due mostly to the fact that they infringed on each other's patents. As Greg mentioned, Tivo is infringing on the play/ff/rew features that Replay patented. So unless Tivo wants to find themselves on the other end of a lawsuit, they won't try anything.

So what would happen to Dish if DirecTV bought TiVo?

 

[vampz26]

So what would happen to Dish if DirecTV bought TiVo?

Nothing...