TiVo Integrates AOL Features

By Jeff Baumgartner, CED Magazine
from BroadbandWeek Direct, May 1, 2002

Tivo Inc. has struck a deal with America Online Inc. to integrate a number of AOL features with the digital video recording company's new Series2 model.

Under terms of the agreement, the Series2 will be able to receive AOL applications such as instant messaging and live chat, which also are offered to existing AOLTV subscribers. Moreover, AOL and TiVo subscribers also will be able to schedule DVR recordings from the AOL service. In connection with the deal, AOL said it will pay an undisclosed development fee.

The companies said the new product will not require the subsidy payments contemplated when the original agreement was assembled in June 2000. Of the original investment of $200 million, which was to be used to cover subsidy costs on potential projects between the companies, approximately $48 million will be returned to AOL. In turn, AOL will return 1.6 million shares of Series A redeemable convertible preferred stock to TiVo.

"By developing an AOL application for the TiVo service, customers will have access to easy-to-use AOL features as part of their entertainment experience," said TiVo President Morgan Guenther.

Designed to help third-party developers deliver applications and services to TiVo subscribers, the Series2 DVR also handles services tied to digital music and photos and video "party games." The box, available from Best Buy or from TiVo's Website, can store up to 60 hours of programming. AT&T Broadband also is trailing the unit in several markets.

Late last year, AOL Time Warner Inc. said it planned to add AOLTV functionality to Scientific-Atlanta-build Explorer 2000 digital cable boxes, which are used extensively throughout Time Warner Cable's networks.