Interactive TV, which has failed to garner popularity in the past, gained a modicum of inevitability -- in the U.S. at least -- on Tuesday, when eight major media companies signalled support for "personal TV" device maker TiVo Inc. with equity investments.
"We are currently working with these partners to establish personal television as a major category of home entertainment," said David Courtney, chief financial officer for the California startup, in a statement. The company envisions a TV viewing experience without a schedule. The others agree seemingly agree with that vision.
The firm started selling set-top boxes earlier this year that use large hard drives to save TV programs to disk. The "personal" part of the TV experience is its ability to search out programs that match the user's interests and save them. Like all Star Trek episodes? TiVo can store them for later viewing.
The investors in TiVo's vision include TV networks CBS and Walt Disney (the owner of ABC) as well as cable companies Comcast Corp., Cox Communications, Discovery Communications Inc., and Liberty Media. Advance/Newhouse and TV Guide Interactive rounded out the investors. "We are interested in the technology," said Gill Schwartz, senior vice president for the CBS television network, one of the investors. "The future will be driven by companies that develop and distribute content. This is a really interesting development in that area."
The announcement follows TiVo's S-1 filing with the SEC to launch an initial public offering to the tune of $80m (£49m). Added to TiVo's previous investors -- including NBC, Phillips Electronics, DirecTV and Showtime Networks -- the line-up forms quite a powerhouse of backers. "Their aim is to build eyeballs and awareness and establish themselves as the defacto service early on," said James Penhune, digital TV analyst for the market researcher Yankee Group, pointing out that "the basic service they are offering is not difficult for others to reproduce."
For Comcast, at least, the investment is just that. "There was an opportunity to invest in TiVo and we took it," said Sam Schwartz, managing director of Comcast Interactive Capital, the financial umbrella that manages Comcast's TV and Internet investments. "We made a financial investment in what we think is an interesting investment. It does not mean that Comcast has made Tivo the exclusive partner that we will would work with."
Good news for TiVo's rival Replay Networks Inc. whose service -- dubbed ReplayTV -- differs from TiVo's in one major way: While TiVo charges a monthly fee for scheduling information after you buy a device, Replay charges nothing. Instead, Replay charges more for the initial device. "(TiVo's release) looks very similar to a release that we are doing next week," said Jim Plant, director of marketing for Replay, who added that many of the same companies will be announcing an investment in Replay on Monday, Aug. 2. "There are networks involved in this deal," he said. "We are getting even bigger support from the electronic manufacturers -- I think they like the fact that we have no monthly fees."
The number and importance of the backers lend credence to TiVo's -- and possibly Replay's -- brand of "personal TV." Still, CBS's Schwartz does not believe either TiVo or Replay will change the TV industry landscape. "The network-affiliate-advertiser model that has driven video distribution remains the dominant way the people receive content over TV," he said. "All attempts to supplant that have not done so -- that includes cable TV."
"We believe the spine of our current model is still strong."