this must be a reason for the deal
DirecTV Group Inc. said it would stop marketing TiVo Inc.'s digital video recorders in October, when the satellite television company plans to introduce its own service."The product we will market is our product," DirecTV Chief Executive Chase Carey said Wednesday at the Reuters Telecommunications, Cable and Satellite Summit in New York
El Segundo-based DirecTV announced in January that it would begin selling its own recorder this year alongside TiVo. But Carey's comments marked the first time the company stated that it would cease promoting TiVo, which enables users to record TV shows and pause live television.
"Our marketing and sales efforts will focus on our new DVR," DirecTV spokesman Bob Marsocci said. The recorder is being developed by NDS Group, a British unit of News Corp., which has a 34% stake in DirecTV.
DirecTV, under an eight-year contract scheduled to end in February 2007, is still required to sell TiVo subscriptions to its customers but will do so only when customers specifically request TiVo, Marsocci said.
Executives at TiVo declined to comment.
TiVo shares fell 37 cents, or 6.2%, to $5.62.
TiVo had enrolled 2.1 million of its 3.3 million subscribers from DirecTV as of April 30. Although DirecTV's decision is not expected to affect current TiVo subscribers, analysts say the move will significantly slow the number of new customers for TiVo. In the three months ended April 30, 77% of TiVo's new subscribers came from DirecTV.
"That figure is likely to go to zero," said Alan Bezoza, analyst with investment firm Friedman, Billings, Ramsey & Co.
Alviso, Calif.-based TiVo, whose troubled relationship with DirecTV has been widely known, has been seeking other partners. In March, TiVo signed a deal with Comcast Corp. to offer service to the cable company's 21.5 million customers starting next year. And this month, the National Cable Television Cooperative, representing more than 1,000 independent cable companies, agreed to offer TiVo to its 14 million subscribers.
