Fox deal, board appointment spur stock
NEW YORK — Video recording purveyor TiVo breathed a sigh of momentary relief Wednesday. Company shares soared nearly 12% as it announced a promotional deal with Fox Entertainment and named DirecTV chief Eddy Hartenstein to its board of directors.
Investors have been concerned that TiVo’s lucrative deal with satcaster DirecTV could be severely cut back once Rupert Murdoch’s News Corp. takes over early next year. Murdoch has indicated that he would look to offer a low-cost digital video recorder option for the service, likely manufactured by News Corp.-owned NDS.
Hartenstein’s appointment and the Fox deal were interpreted as signs that TiVo’s contract with DirecTV may be safe for a little longer, though the entrance of the News Corp. regime and new CEO Chase Carey could yet change the negotiating mood.
Almost half of TiVo’s 800,000 customers come from its DirecTV joint venture.
TiVo is also starting to feel the competitive pressure from increasingly aggressive cable operators like Time Warner that are rolling out their own combo set-top box DVRs.
Company also announced that former Primedia chairman Tom Rogers is joining the board. Rogers exited the publishing conglom earlier this year as its stock price sagged along with a weak magazine ad market.
“Eddy Hartenstein knows firsthand how TiVo can help drive new revenue and business opportunities for business partners,” said Mike Ramsay, chairman-CEO of TiVo.
Part of Fox fold
Under the deal signed with Fox, TiVo will push long commercials for Fox programs such as “24,” “The OC,” “Skin” and “Arrested Development” to its customers.
Shows will be promoted in a monthlong TiVo Showcase.
Fox also has secured the license to utilize a TiVo recording tag during all promos for these shows and others. Tag will be visible onscreen whenever the network promos appear during a live broadcast. When a viewer clicks the remote, he will go directly to the TiVo Showcase content stored on the hard drive.