RealTime IT News

TiVo: Bringing TV to Life

With nearly every family in America having a TV in their living rooms, the concept of interactive TV has always seemed like a no-brainer. Yet, despite many efforts from mega media companies, nothing seems to work.

But in the past few years, interactive TV has been gaining traction. One of the top providers is TiVo . The concept for TiVo was hatched by Mike Ramsay and Jim Barton, both of whom have a deep understanding of interactive TV; that is, they helped create a joint venture for Time-Warner and SGI.

However, Ramsay and Barton quickly realized that they could do a much better job on their own. TiVo was born.

The company has a set-top box that hooks into your TV. When watching TV, you can pause, instant replay or do slow motion at any time. By clicking a button, you can locate and record your favorite shows. The recording is done in digital and there is no videotape required.

Other features include:

Now Playing: This lists on your TV screen the shows you have recorded. You can click a show to watch it.

TiVo's Suggestions: For any show, you can select Thumbs Up or Thumbs Down. TiVo then recommends TV shows based on this information.

TiVolution Magazine: This is a daily guide that shows the latest specials, movies and TV shows.

The TiVo box is hooked to your telephone system. So whenever there are new services, your TiVo box will be updated.

Critical to the success of TiVo has been strategic partnerships. To this end, the company has struck distribution deals with Philips Consumer Electronics and SONY. In all, there are more than 4,000 retail outlets that sell TiVos.

TiVo has also aligned with AOL and DIRECTTV, as well as major network programmers, such as ABC, CBS, ESPN, NBC, HBO, Showtime and the Discovery Channel. In fact, TiVo has been able to attract AOL, DIRECTTV, CBS, Philips Electronics, and Showtime as investors.

The company is still in the early stages. In the past quarter, revenues were $719,000, which was up from $8,000 in the same period a year ago (the installed base is now 51,000). The sequential growth rate was 70%. Losses were $29 million.

Interestingly enough, TiVo has been pursuing international markets. For example, the company recently signed an agreement with Thomson Multimedia to sell TiVo boxes in the U.K.

Yet, TiVo's critical deal was with AOL. The term is three years and TiVo will become an AOLTV programming partner. TiVo will develop a special set-top boxes for AOL, in which TiVo will be the exclusive provider of personal TV features. Also, AOL agreed to invest up to $200 million.

With its cutting-edge technologies and partnerships, TiVo is in a strong position to realize the dream of interactive TV. Already, the company is showing strong subscriber growth, which should continue for many years and provide fuel for the stock price.