Move Over Google TV, Here Come Cox and TiVo
Colin Dixon
Senior Partner, Advisory
August 13, 2010
TiVo announced Thursday that Cox Communications would fully support and promote the DVR pioneer's Premiere box and service throughout its cable system. The deal is a first for TiVo because it fully integrates Cox’ VoD library into the TiVo interface. It’s also a first for North American cable; Cox is the first company to make its full VoD library available through a retail product. But there’s a lot more to this deal than meets the eye. For Cox, it marks a radical departure from standard cable practices; a move that brings with it substantial risks as well as the potential for great rewards.
The integration of the VoD library into the TiVo interface is news in itself. But the real headline is that all of TiVo’s Internet features, including TiVoToGo, will also be available to Cox customers. As well, the TiVo Premiere DVR will provide a fully integrated search function that returns results from the VoD library, DVR, broadcast TV and Internet services such as Netflix. Google TV plans to include similar functionality when the integration with Dish Network is complete. With this announcement, Cox customers can enjoy similar benefits through a TiVo.
I talked with Jeff Klugman, Senior Vice President and General Manager at TiVo, to get some of the details of the deal. He told me that the integrated search would prioritize movies and shows that the customer has access to for free by putting those at the top of any search list. As he explained, this might mean that a search for “24” might return episodes from the current season available in the Cox VoD system alongside previous seasons available from Netflix. Further down the list might be episodes available from Amazon Video on Demand available for $1.99 an episode.
The cost to Cox customers is considerable: a customer must buy a TiVo Premiere at retail, which currently costs $299.99. However, once purchased Cox will install the device in the customer’s home for free. The customer will also have to pay TiVo $12.95 a month in service fees. But since they will no longer have to pay Cox a monthly rental fee for a set-top box or DVR service fee the net monthly fee should be no more than they would normally pay. It is this last point that is such a radical departure from the cable norm. Cox customers can switch DVR service revenue from Cox to TiVo and the cable company will help them make the switch. Cable companies hate giving away control, particularly control of subscribers. In TiVo’s deals with Comcast and RCN the cable companies retain total control of the customer.
For the Cox subscriber this could be a great deal. If they see sufficient value in the Internet features – including Netflix, Blockbuster on Demand, Amazon Video on Demand and YouTube – to justify the expense of the TiVo Premiere box they will end up with a far richer set of content to choose from. In addition, they will have a search function that works across all content available to help them navigate it all. The problem is Cox customers have to wait until early next year to get it. Let’s hope that deadline is a TiVo date, and not a cable one: cable is renowned for missing their service introduction dates.
With the Cox deal, it looks like TiVo is finally beginning to make real progress with the operators. If it works out well for Cox, expect to see others follow quickly. Unfortunately, it will be well into 2012 before we know whether it has worked or not.
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