TiVo Inc. secured a strong foothold in the battle to control the digital video recording market Wednesday as electronics giant Sony Corp. of America said it would take a minority stake in the company, build set-top boxes and create programming for the personal TV service.
Financial terms of the deal were not disclosed.
TiVo is planning an initial public offering of 5.5 million shares of stock at a projected range of $11 to $13 a share, according to a Securities and Exchange Commission filing.
The Sunnyvale, Calif.-based company said it plans to use the estimated $60 million it hopes to raise from the offering to boost advertising and promotion of its service and to develop products.
The nonexclusive deal is a coup for upstart TiVo. The company began selling its computer disk-based digital video recorders this year competing with close rival Replay Networks Inc., which has a similar service.
As part of the deal, Sony will begin distributing its own branded TiVo-equipped set-top boxes sometime next year. Product decisions about pricing and timing have yet to be ironed out.
Sony will also incorporate TiVo into its next generation of TV sets and electronic equipment.
Sony Pictures Entertainment will provide interactive versions of its TV programs to the service, including playable editions of “Jeopardy!” and “Wheel of Fortune.” It also hopes to provide video-on-demand movies in the future.
Sony execs are expected to join TiVo’s board of directors.
TiVo’s set-top boxes, currently built by Philips, enable viewers to record up to 30 hours, select programs based on such criteria as favorite theme or actor, and pause or rewind live programming.
“This alliance further validates TiVo’s personal television service as the next big thing in television,” TiVo CEO Mike Ramsey said during a teleconference.
Media, cable and consumer electronics players CBS, Cox Communications, Discovery Communications, Disney and Liberty Media subsidiaries Liberty Digital and Encore Media Group are also investors in TiVo.
Investors in rival Replay include Time Warner Inc. and Disney.