Sony to plug TiVo into its products
Published: 19 Oct 2001 08:32 BST
Sony said on Thursday that it has signed a deal that will allow it to incorporate TiVo's personal digital recording technology into its line of consumer electronics products worldwide.
TiVo's technology lets consumers record TV shows onto a hard drive so they can view them later. Consumers typically pay a monthly fee to access the service.
Specific financial terms of the deal were not released, but TiVo chief executive Mike Ramsay said during a conference call on Thursday that the pact should bring in $10m to $15m in revenue during the next 12 months.
The seven-year deal calls for Sony, which is an investor in TiVo, to pay royalties on a per-box basis. Sony will also pay an upfront fee for access to TiVo's client source code, and has the option of licensing its server code for additional fees.
TiVo executives said they also expected the deal to bring in revenue through software upgrades, services and fees.
The licensing agreement announced Thursday extends an earlier pact between the two companies signed in September 1999. Sony has been producing TiVo boxes and bundling the technology with DirecTV receivers. TiVo also has a deal with Philips Electronics to produce TiVo boxes.
Ramsay said the deal will also allow Sony to get more creative with the TiVo technology.
"Today, our agreement with Sony, as it is with other manufacturers, centers around their ability to manufacture boxes that are really TiVo-designed," he said. "This agreement gives Sony access to a deeper and greater range of technology assets for the purpose of taking that technology and developing a range of greater designs that are Sony-specific."
While the technology has built a loyal fan base, TiVo has not yet been able to turn a profit. And it faces competition from companies including Microsoft and AOL Time Warner, which are both working on video-on-demand services.
Ramsay said the Sony deal was "the first of what we expect to be a series of agreements that will accelerate" the company's technology.
"This deal is the cornerstone of TiVo's licensing strategy," he said. "This is an important step toward the mass-proliferation of TiVo."
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