RealTime IT News

AOL Sinks $200 Million into Interactive TV

Watching television programs could become the most widely used interactive source of entertainment in the world.

If regulators approve of the America Online, Inc. and Time Warner, Inc. merger, Internet users could someday customize CNN content with the single-click of a button on a set-top box.

Global interactive service provider America Online and TiVo Inc. Wednesday formed a three-year strategic agreement in which the personal television creator becomes an AOLTV programming partner.

Under the agreement, AOL and TiVo intend to work together to develop a dual-purpose AOLTV-branded set-top box. TiVo will be the exclusive provider of personal TV features on these set-top boxes.

AOL will invest up to $200 million in TiVo and receive warrants to purchase additional TiVo shares in order to anchor the deal.

Barry Schuler, AOL interactive services president said its making a bold move into personalized television services over the Internet.

"We're pleased to expand our relationship with TiVo, a pioneer in personal television, to enhance the services we will be providing AOLTV subscribers," Schuler said. "Bringing TiVo's personal television features to AOLTV will be another way we can offer our members the best possible interactive television experience."

The TiVo Personal TV Service digitally records television shows, without videotape, so consumers can watch what they want, when they want to watch it.

Mike Ramsay, TiVo president and chief executive officer said the AOL agreement would land it in the "Promised Land" of wholly interactive TV services.

"We believe our agreement with AOL positions us to lead the evolution of personal TV to the next level and begins to bring TiVo closer to delivering the ultimate television experience," Ramsay said.

"Delivering better TV is our mission at TiVo," Ramsey added. "We're pleased that by working with America Online in the development of an AOLTV set-top box, we will have the potential of delivering a far richer, more entertaining TV experience for viewers and to accelerate adoption of the TiVo Service."

Under this agreement, AOLTV subscribers using TiVo-enabled set-top boxes will be able to pause, slow motion, or instant replay live TV. Users can also tell TiVo to automatically find and record their favorite programs every time they air. TiVo can also recommend shows that match consumers' interests through its built-in suggestion feature.

The investment expands on a previous alliance between the two companies forged in August 1999. AOL and TiVo agreed to collaborate on interactive television services at that time.

AOLTV is part of the AOL's "Anywhere" initiative designed to offer members new interactive services that will enhance their television viewing experience.

The AOLTV branded set-top box incorporating TiVo's features has been targeted for delivery in early 2001.