Fresh Vibes on TiVO & DirecTV
If Vitaliy can talk about Russia I can do another TiVO column!
Hoofy is scrambling for shelter again today as the bids start dripping through the sluice grate. Speaking of which (pain and bleeding), I made some calls to and about TiVO (TIVO) yesterday and thought I'd pass along what I heard.
According to my sources (who I am protecting by taking no notes whatsoever during the calls):
- There are roughly 2.5 Million DirecTV (DTV)/ TiVO boxes currently installed with about 750k boxes remaining in inventory.
- The NDS Group (NNDS) DVRs are still set to ship this month, primarily to new DTV customers. They won't be Hi-Definition. Motorola (MOT) is making Hi-Def boxes for DTV.
- Given DTV's stated intent to sell through the TiVO inventory but not seek to swap out existing TiVO units in the near term, TiVO figures to get paid for roughly 3.3 million DirecTiVO subs until the partnership expires in 2007.
- Jury-selection has begun in TiVO's patent infringement against Echostar (DISH). I personally regard this trial as more important to TiVO's long-term viability than anything DTV does. Losing doesn't kill TiVO, winning the case would be "very good."
- One of the unexpected impacts of DTV's ousting of TiVO has been to revitalize the conversations with cable companies (other than Comcast (CMCSK), with whom TiVO goes on-line next year). TiVO's basic "pitch," whatever you may think of it, to the MSO's is along the lines of "DirecTiVO customers love TiVO and DTV is alienating 3.3 Million of them by cutting us off. Why not go after those customers?"
- MSO's would very much like to take 3.3 Million of DTV's customers.
- The new CEO is well-regarded, in house at TiVO. To be candid, I've heard mixed things but the vibe seems to be that recent exec departures are positive and part of "cleaning house" (as opposed to the "rats leaving a sinking ship" type of exec turnover).
Again, just passing along what I heard in a series of calls. I'm long TiVO and it's been a pig so I wouldn't pretend to offer advice on the shares.
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