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TiVO And DirectTV Extend Partnership With HD TV DVRs

DirectTV and TiVO plan to roll out HD DVR boxes in 2009 and extend their business agreement through at least 2015.

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The high definition DVR box is targeted for release in the second half of 2009, Reuters reports.

The deal includes an extension of intellectual property rights between the two companies and the federal filing indicates that DirectTV will pay a substantially higher monthly premium to TiVO for households equipped with the new HD DirectTV DVR boxes.

The monthly fees paid by the satellite TV provider are also subject to monthly minimums that rise throughout the term of the agreement.

"This new deal should minimize the DTV attrition headwind TiVo has felt as DTV's subs have moved to HD (where there is no TiVo offering today)," said Citigroup analyst Tony Wible in a note to clients. "Overall, the new deal should help protect the roughly $22 million of high margin revenue TiVo receives from DirecTV today."

DirectTV provided TiVO a large source of subscribers back in 2005, but the partnership between the two companies became tense once DirectTV decided to offer its own DVR box. The DirectTV DVR box, made by the NDS Group, was a direct competitor to TiVO.

Still, DirectTV and TiVO did not sever ties in 2005, instead extending the service agreement for TiVO customers through 2009. The HD TV DVR revelation will extend the partnership between the two companies until 2015, at which point DirectTV has the option to extend the agreement through 2018.

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