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.

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