DirecTV, TiVo in HD DVR deal

TiVo Inc. said Wednesday that it would launch a new high-definition digital video recorder under an extended agreement with DirecTV Group Inc., reigniting a once-cooling relationship.

The new development deal extends the companies’ agreement by five years to Feb. 15, 2015, and calls for satellite television provider DirecTV to market TiVo’s DVR products to new customers for the first time since DirecTV began using a rival DVR.

The partnership helps TiVo, a pioneer in DVRs, gain access to DirecTV’s HD market. High definition is a key growth area for TiVo because it generally makes more money per unit sold than with standard-definition recorders.

TiVo shares gained 24 cents, or 3%, to $8.75, and DirecTV shares slipped 8 cents to $27.54.

DirecTV and TiVo began working together in 2000, when DirecTV first offered DVRs with TiVo service. But over time the relationship became muddled, with DirecTV using DVR technology from NDS Group. Late last year DirecTV extended its contract with NDS to 2013.

DirecTV has continued to support TiVo service for existing customers, but the subscription base has shrunk as boxes break and as subscribers leave or upgrade to HD service.

El Segundo-based DirecTV said that it would still offer its own set-top boxes, but that the new TiVo box would be an additional option. This could boost Alviso, Calif.-based TiVo, whose subscriber base has been dropping steadily because of increased competition from generic recorders from cable and satellite operators.

The new TiVo recorder is expected to be available starting in mid- to late 2009.