Market Insight

Virgin Media launches TiVo

December 07, 2010

Merrick Kingston Merrick Kingston Associate Director, Research & Analysis, Digital Media & Video Technology

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After announcing in May 2010 its intent to deploy HD DVR set-tops with Tivo middleware, UK MSO Virgin Media has begun shipping the STBs. The Cisco-built CT8685 boxes are expected to run Broadcom BCM 7413 SOC (with Flash Lite 3 built-in) and feature 512MB of RAM. They will include three RF tuners (two active at launch), a narrowband 10Mbps DOCSIS modem, and a 1TB hard disk. Canal Digital, the pan-Nordic DTH operator, also announced a deal for Tivo middleware in November.

In addition to its use of Tivo middleware, the box's UI, which has been customised by Virgin, is based upon a reference design from Tivo's series 4 Premiere interface. While the Premiere interface is Flash based, it is not yet clear whether Virgin's will be so at launch. Priced up-front at GBP 199 for subscribers to Virgin's XL package, the Tivo platform brings both a recommendation engine, as well as access to over-the-top content via dedicated BBC iPlayer and YouTube applications.

Virgin's deployment appears to be another nail in the coffin of Tivo's standalone, retail hardware business. Over the past year, Tivo has secured no fewer than six major middleware deals with pay operators and device manufacturers: Technicolor and Samsung will incorporate the software in their STBs; Insignia will port the software to its connected TVs; and cable operators ONO and Virgin Media and satellite operator Canal Digital have all selected Tivo as their exclusive middleware for future deployments.

One operator is still sponsoring the standalone Tivo hardware business, although not directly. US MSO Cox has pledged to support Tivo Premiere set-top to any of it's subscribers, integrating the middleware into the backend of it's platform. However, given that the deal falls short of Tivo actually supplying boxes to Cox exclusively or directly it is difficult to see the relationship as a signal of Tivo's resurgence as a hardware vendor.

Against this backdrop of middleware deals, the price movements which have characterized the firm's Premier STB are also suggestive of Tivo's software focus. Initially coming to market at USD 299 in March 2010, the Premiere currently retails for USD 99; while difficult to establish definitively, such steep price declines could be consistent with a strategy to deplete inventory for retail.

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