DTV to buy TiVo?

[ChuckyBox]

Someone posted this link over on the Yahoo! TIVO stock board:

http://www.dbsforums.com/vbulletin/showthread.php?postid=400996#post400996

I'm glad my boxes are lifetime, I'd hate to think of sending Rupert money every month.

[HDTiVo]

??????????????????

[jfh3]

Someone posted this link over on the Yahoo! TIVO stock board:

http://www.dbsforums.com/vbulletin/showthread.php?postid=400996#post400996

I'm glad my boxes are lifetime, I'd hate to think of sending Rupert money every month.

That seems highly unlikely - that would be an amazing admission of defeat by DirecTV. It's hard to believe that the R15 could be that much of a failure so quickly.

I think that ship has already sailed - once the Series 3 box is out, I could care less what DirecTV does, since I'll almost certainly leave and go back to cable. Tivo got me to DirecTV in the first place and Tivo will get me to leave DirecTV. :)

[cwerdna]

That seems highly unlikely - that would be an amazing admission of defeat by DirecTV. It's hard to believe that the R15 could be that much of a failure so quickly.
I dunno how likely it is either, but weirder things have happened...

Apple switched from PowerPC to Intel
Microsoft switched from Intel to PowerPC w/Xbox 360
Microsoft settled w/Sun and they're working together on various things
Palm decided to use rival Windows Mobile from Microsoft on one of their devices
Tivolutionary aka RB went to Replay [but I think he left long ago]

[HDTiVo]

??????????????????
I posted this and have not gratified the concept with a click on the link.

A post in another forum about a buyout? Give me a break. Is this a fishing expedition? :(

[ChuckyBox]

A post in another forum about a buyout? Give me a break. Is this a fishing expedition? :(
While I think everyone is taking this rumor with a huge grain of salt, if you had clicked the link you would have seen that post wasn't by some random guy, he's a fairly reliable, long time member/moderator of the DBS Forums.

Are you suggesting that TiVo is fishing?

[tgr131]

he's a fairly reliable, long time member/moderator of the DBS Forums.



Yeah, Dan is the man when it comes to inside info on D*, although he clearly states this is a rumor.

I'm to the point where to get HD, I've had to get a SA8300HD. I'm eagerly awaiting the S3, so I can ditch the 8300, and stop paying for cable AND D*.

I'm not sure I WANT D* to buy Tivo anymore.

David

[Gunnyman]

I think the OP of the rumor won't mind being outed since he posts here too.
Dan said himself he'd be suprised if it was true, but he also said his source was pretty reliable.
Dan's track record is pretty good with this stuff too so I'll latch on to the "hope it's true" crowd.

[HDTiVo]

While I think everyone is taking this rumor with a huge grain of salt, if you had clicked the link you would have seen that post wasn't by some random guy, he's a fairly reliable, long time member/moderator of the DBS Forums.

Are you suggesting that TiVo is fishing?
Fine, I clicked your link...total crap. Are you stock pumping?


Originally posted by Dan Collins on 03-13-2006 at 07:52 PM in post #10:
RUMOR ALERT

Totally unverified, but I've heard a rumor from a somewhat reliable source that DirecTV is talking with TiVo about an acquisition. If true, it would be a great move for News Corp - they buy a company they should have bought two years ago, but will get it at a fraction of the cost they would have paid then.

BTW: the reported reason - the less than stellar performance of the R15 and continuing delays in HR20 development.

I make no claims about the accuracy of this rumor, but it has a bit more credibility than the average web rumor. Personally, I'd be amazed if this is true.

[Turtleboy]

I don't believe it.

But if you told me a couple of months ago that Tivo would be partnering with the loathesome PTC, or getting rid of lifetime, I wouldn't have believed it either.

[jmoak]

Are you suggesting that TiVo is fishing?He's not suggesting that tivo is fishing, just that others may be looking for reasons for the reactions of things that can't be discussed here.

The clue to what lies in the tenth word of your first post.

The only thing that gives this rumor any validity is simply where it comes from.

Rather strange actually, for if it was true, directv would be admitting defeat and it would be a major black eye to yet another newscorp family company.

in all honesty though, my track record is not very good when attempting to apply logic to divine the future actions of a megacorp.
:o

[ChuckyBox]

Fine, I clicked your link...total crap. Are you stock pumping?
By posting Dan's day-old highly-unlikely rumor here? Whatever you want to think.

[HDTiVo]

By posting Dan's day-old highly-unlikely rumor here? Whatever you want to think.
Personally, not only do I not like that you posted it, but I also don't like the way you posted it; with no disclosure or caveat.

Then you followed up with...

if you had clicked the link you would have seen that post wasn't by some random guy, he's a fairly reliable, long time member/moderator of the DBS Forums
Even in a place that was for SxxxK talk, my personal ethics would prevent me from doing any of that.

[ChuckyBox]

Personally, not only do I not like that you posted it, but I also don't like the way you posted it; with no disclosure or caveat.
What possible caveat could I include with any authority? I posted a link to a rumor -- a clearly-labeled rumor -- on another site. If my little joke at the end wasn't enough, a simple click on link -- which you admitted you didn't do -- made clear both the source of the rumor and its status as a rumor.


Then you followed up with...

No, what I followed up with was...

While I think everyone is taking this rumor with a huge grain of salt, if you had clicked the link you would have seen that post wasn't by some random guy, he's a fairly reliable, long time member/moderator of the DBS Forums.
If you are going to accuse me of some kind of disingenuousness, you damn well better learn to quote me correctly. I don't appreciate you editing my words to make them more favorable to your argument.


Even in a place that was for SxxxK talk, my personal ethics would prevent me from doing any of that.
Get over yourself. Your history of posts here is riddled with speculation, second-guessing, opinions, and discussion of rumors -- just like everyone else's. It is a discussion board, that's what it is here for. The possibility of TiVo being acquired by DTV or anyone else is not only on-topic, it is entirely relevant and affects most, if not all, of us.

[dgh]

If my little joke at the end wasn't enough,

That was a joke? I wouldn't want to send Rupert any money either and that's not a joke.

[HDTiVo]

Well, Chucky, if you don't know the difference, then that is your problem.

I for one will be reading you in a much different light from now on.

[lajohn27]

Dan is a VERY respected moderator over at his forums and I believe that he did get this rumor from a good source.

Whether or not it is true.. and if it is true.. whether or not it comes to pass.. is a big question.

Either way, it's worthy of being posted here.

PS> HD - we get it.. you're not happy with TIVO - every post you make drips with it. Chucky did nothing wrong in this thread. For you to react as you did without even checking it speaks volumes about your headspace.

[ZeoTiVo]

Well, I doubt Chucky or his Box had any ulterior motives in posting the link to the rumor

but

consider how many other rumors about TiVo picked up steam into being seen as true. A post on this forum with a link to a "second" source. Some blog or quasi journalist picks it up and BOOM - it is all over the place.


I give you the infamous headline "TiVo will no longer allow FastForwarding through commercials"


I think a caveat of - I was looking at this other site and saw a post that would interest people here. I have nothing else to confirm this but go read the post for yourself. Also just a subject line of "DTV to buy TiVo?" without adding rumuor to it was asking for this to get out of hand as well.



with that out of the way
DTV would pay for a whole company just to get a DVR back because they have trouble making the R15 and R20 work :confused:
No cable company would ever make a deal then, Comcast would wiggle out and how would DTV feel selling Stand Alones to make Cable a better experience?

this is about the worst fit in the history of mergers or portfolios of companies :rolleyes:


Rupert Murdoch probably got POed and threatened to just buy TiVo and get rid of the whole DVR team working on the R15/20

[ChuckyBox]

That was a joke? I wouldn't want to send Rupert any money either and that's not a joke.
Heh. I'm sure you're not alone. But there are a ton of DirecTiVo owners who do send Rupert a check every month, and who would probably benefit from the rumored acquisition (by way of software updates, "new" features, and system longevity). As a standalone box owner I would worry less about who got the money and more that the pace of innovation might slow. I think TiVo constantly fighting for its life has led to a lot of R&D that benefits the end users.

But I do think this end-point isn't one we have to worry about -- even in the unlikely event that DTV was interested in acquiring TiVo, the idea that Rupert would have access to their subscribers through the TiVo standalone box would probably so freak out Comcast and Time Warner that one or both would jump in with a better offer.

[megazone]

I could easily believe that TiVo and DTV/NDS/News Corp were in conversations about a merger/buyout. It isn't uncommon for those kind of conversations to take place between corporations. The R15 was six months late and has been slammed again and again in reviews, and the HR20 is late too. I would expect someone at DTV, or parent News Corp, to be looking at options - like renewing the TiVo license and getting a Series3-based HD unit for DTV up to just buying TiVo.

It doesn't mean anything will come of it - like Dell perpetually 'evaluating' AMD chips.

[samo]

Why would DTV want to buy TiVo in a first place? Granted R15 has some bugs, but it will not cost them half a billion to fix them. When original DirecTiVo was released not only it had bugs, but dual tuner wasn't activated for almost a year. DTV is not a stranger to implementing improvements and bug fixes after hardware is placed with consumers. Besides, they can just extend a contract and pay $1 per household instead of buying themselves a major headache. The only way this rumor makes sense if TiVo wins lawsuit against Dish, then Ruppert would love to buy TiVo and stop Dish from selling DVRs or charge them huge licensing fees.

[interactiveTV]

Why would DTV want to buy TiVo in a first place? Granted R15 has some bugs, but it will not cost them half a billion to fix them. When original DirecTiVo was released not only it had bugs, but dual tuner wasn't activated for almost a year. DTV is not a stranger to implementing improvements and bug fixes after hardware is placed with consumers. Besides, they can just extend a contract and pay $1 per household instead of buying themselves a major headache. The only way this rumor makes sense if TiVo wins lawsuit against Dish, then Ruppert would love to buy TiVo and stop Dish from selling DVRs or charge them huge licensing fees. I agree 100%.

Too early for the lawsuit though. And yes, these talks happen all the time.

Quick Q: Would it help DirecTV to extend the contract or would new Tivo development need to be done for the new MPEG4 systems? I'm not up on DBS news.

Personally, not only do I not like that you posted it, but I also don't like the way you posted it; with no disclosure or caveat. Hmmm, I guess there's a new sheriff in town.

Personally, not only do I not like that you accused Chucky of stock pumping, but I also don't like the way you posted it, with attitude and hubris. And the funny thing is, that's worth spit. Who CARES what I don't like personally? What is this? Oprah? But I'm at a disadvantage and don't know who you are and maybe you ARE Oprah.

_ITV

[samo]

Quick Q: Would it help DirecTV to extend the contract or would new Tivo development need to be done for the new MPEG4 systems?
Obviously they will need new hardware. And they made a decision to go with NDS hardware. If DTV will want to go back to TiVo, it would take a long time before they can develop and manufacture new hardware and it probably not in cards since NDS hardware is just few months away from retail distribution and Dish is already selling MPEG4 DVRs. And honestly, R15 (SD version of NDS DVR) is not that bad. It has more features than TiVo and except for few minor bugs it works just fine. If it had 30 sec skip I would prefer it to TiVo. The guide with PIP is superior to TiVo, the search and season pass are on par, USB port will be used in near future to add extra storage, reserved space will be used for VOD instead of commercials and it has FSI. Overall it is better DVR , but of course some TiVo users don't like because it has different UI and bugs. But I bet if you presented both to a new user 90% of the users would prefer R-15 to TiVo. I don't see any reason why DTV would want to go back to TiVo (bugs in a software are not good enough reason because we all know that it is just a matter of time before they will take care of them).

[ChuckyBox]

I don't see any reason why DTV would want to go back to TiVo (bugs in a software are not good enough reason because we all know that it is just a matter of time before they will take care of them).
I don't think DTV is either buying TiVo or renewing the contract, but I could make a case for it even without considering the less-than-spectacular debut of the R15. 2.9 million satisfied customers, brand recognition, Comcast (maybe others) coming after their subs with triple threat services and now offering TiVo, to boot. Given how much they pay TiVo, it would probably make more sense to just buy the company, because that would also give DTV the standalone business with which to get deeper into the cable companies' sub base, and it would also provide customers for the online services that News Corp. wants to offer. There's other stuff: IP, content downloads, KidZone, etc. You could probably create a pretty compelling business case for it if you set your mind to it. But there are a lot of things one could make a business case for that will never happen.

[MighTiVo]

If they bought TiVo I would expect it to be to scavange minor licenses and let most of the business waste away.

I just can't imagine it would be a good thing for TiVo

[MickeS]

Even in a place that was for SxxxK talk, my personal ethics would prevent me from doing any of that.

Doing what? Clicking on a link about a rumor of someone wanting to buy TiVo? I can't even remember how many of those threads have been here... what's the big deal? What does reading that have to do with your personal ethics?

By the way, I have no clue one way or the other. As long as my lifetime keeps working, I don't care who owns it. :)

[cwerdna]

. But I bet if you presented both to a new user 90% of the users would prefer R-15 to TiVo. I don't see any reason why DTV would want to go back to TiVo (bugs in a software are not good enough reason because we all know that it is just a matter of time before they will take care of them).
LOL!

I think if you were to present them in an objective manner to both, I doubt the R15 could do any better than 50/50. I seriously doubt that the "90% preferring the R15" would hold true if you had the new users use each of them for a month.

[samo]

LOL!

I think if you were to present them in an objective manner to both, I doubt the R15 could do any better than 50/50. I seriously doubt that the "90% preferring the R15" would hold true if you had the new users use each of them for a month.
If you had the new users use each of them for a month IN PRESENT STATE I agree. Bugs tend to get on people nerves. But if you just presented set of features on demo models, no question in my mind that R-15 wins hands down. Also if you let users test both boxes in a state they were few months after introduction (so both units have bugs and TiVo is a single tuner), R-15 would look better. Of course if you comparing mature units with stable software to brand new software release - bugs alone would make new software look bad. I would expect 6-8 months from now R-15 to be rock solid with working USB port, RF remote and VOD. I hope they add 30 sec skip (of course new user wouldn't know that TiVo has 30 sec skip) and fix some guide quality issues. As for the rest of the functionality, R-15 is better than TiVo in many areas already and at least a match in almost everything else. After few months of use, I'm finding that I prefer to record premium and PPV channels on R-15 and I'm using TiVos just for network and cable channels. I also like that R-15 has 1.5 hour buffer so if you leave it on your favorite channel you almost always can get back to beginning of the last show.

[MighTiVo]

LOL!

I think if you were to present them in an objective manner to both, I doubt the R15 could do any better than 50/50. I seriously doubt that the "90% preferring the R15" would hold true if you had the new users use each of them for a month.

As much as I like TiVo I was surprised that a friend that just got one for the first time and set it up himself in place of a standard receiver found it confusing and too slow.
He mentioned this to he installer that came for the real install in another room and they replaced it with the R15 which he loves.

For new users the R15 may be better - but I don't want one, I want full functionality supported on my TiVo!

[rhuntington3]

Very interesting, indeed!

[ZeoTiVo]

The only way this rumor makes sense if TiVo wins lawsuit against Dish, then Ruppert would love to buy TiVo and stop Dish from selling DVRs or charge them huge licensing fees.

Good point Samo - I had not considered the echostar suit. Having that Patent after a won lawsuit would indeed make News corp very happy and be worth some good money.

Hmmm

[lajohn27]

Would that patent (if defensible) be worth a half a billion dollars? Maybe?

[ChuckyBox]

Would that patent (if defensible) be worth a half a billion dollars? Maybe?
It is entirely possible. It just depends on how broadly it is applicable and how hard the jury comes down on Echostar (if, indeed, they do).

The mistake most people make in this kind of discussion is assuming that TiVo could be had for its market cap. It couldn't. It couldn't be had for anything close to its market cap because TiVo isn't actively trying to be acquired. A suitor would have to convince the board to sell, and that would probably take at least $1.5 billion, and probably more. If TiVo could be had for $500 million it would have been sold long ago.

[davezatz]

As long as we're speculating, I don't see DTV buying TiVo. Actually let me rephrase that... I don't see TiVo selling to DTV. Sure it's possible, in fact anything is possible. I do think it's likely these two companies will try to extend their current deal though - I don't think DTV is prepared to replace every TiVo box out there with inferior hardware this time next year.

[lajohn27]

Chucky - didn't mean to imply that the company could be had for that - my mistake on that point - what I meant is would that be the value of the patent in terms of adding value to TIVO's bottom line etc.

J

[ChuckyBox]

Chucky - didn't mean to imply that the company could be had for that - my mistake on that point - what I meant is would that be the value of the patent in terms of adding value to TIVO's bottom line etc.

I wasn't referring to you, actually. I've seen it here (samo's comment, e.g.) and in various comments in the press, Motley Fool, etc.

Given the potential for triple damages, licensing fees, etc., the patent could easily give TiVo that kind of boost. If they win this case, and the jury comes down hard on Echostar, TiVo will be in a very good position. But court cases are risky, juries capricious, appeals courts unpredictable.

Normally a case like this would have been settled. But TiVo seems to want a court ruling to back up their IP. If they get it, their negotiating position in the industry gets a lot stronger. If they don't get it, they really aren't much worse off than they are now, since everyone is ignoring their IP anyway. It has been expensive to pursue this suit, but the upside is potentially huge, and the risk is limited.

[samo]

It is entirely possible. It just depends on how broadly it is applicable and how hard the jury comes down on Echostar (if, indeed, they do).

The mistake most people make in this kind of discussion is assuming that TiVo could be had for its market cap. It couldn't. It couldn't be had for anything close to its market cap because TiVo isn't actively trying to be acquired. A suitor would have to convince the board to sell, and that would probably take at least $1.5 billion, and probably more. If TiVo could be had for $500 million it would have been sold long ago.
Market cap is just the number that fluctuates daily. Gives you an order of magnitude at best. The actual value of the company is how much willing buyer is ready to pay and seller is willing to take. For example ReplayTV sold on an auction "lock, stock and patents" for $40 million, because nobody was willing to pay more (Dish, some cable companies, CE manufactures and even TiVo were interested in purchase at the time). Granted TiVo has more subs than Replay ever did, but what Replay had as far as a technology and patents (remember, they cross licensed TiVo patent years ago to settle lawsuit) wasn't that much different from TiVo. If TiVo was for sale, it could probably get more but not much more, since they do not make profit on existing subs (so value of the subs is relatively small) and DVR technology can be replicated relatively easy as has been shown by cable and satellite companies. You use $1.5 billion number as if it is pocket change. You know how much profit you can make on $1.5 billion even if you invest it safest securities like mortgage bonds? To help you with math 4.7% (30 year bond) on $1.5 bil is about $70 million a year with almost no risk involved. Why would anybody want to invest that kind of money to buy the company that never made a dime in 8 years? Future profits? You have to be brain dead to believe that TiVo is a good investment at this type of price.

[ChuckyBox]

If TiVo was for sale, it could probably get more but not much more, since they do not make profit on existing subs (so value of the subs is relatively small) and DVR technology can be replicated relatively easy as has been shown by cable and satellite companies.

If you strip off the rest of the company and look at the current subs on a DCF basis, you can arrive at a valuation. You could also do just a bit more and keep the hardware and software current, add new subs as they come but not pursue growth at a loss, and come up with another valuation. You and I could then argue back and forth for weeks and never agree on a single point. So let's save the trouble and just agree that we see the value of TiVo, the company, differently.


You use $1.5 billion number as if it is pocket change.

1) $1.5 billion is pocket change to some companies; 2) I used it as an example of why it is unlikely, or at least difficult, for TiVo to be acquired.


You know how much profit you can make on $1.5 billion even if you invest it safest securities like mortgage bonds? To help you with math 4.7% (30 year bond) on $1.5 bil is about $70 million a year with almost no risk involved.

Why do your posts so often contain insults? If you could understand that, you'd go a long way toward understanding why people react to you the way they do.


Why would anybody want to invest that kind of money to buy the company that never made a dime in 8 years? Future profits?

Companies don't acquire other companies for their historical performance, they acquire them for growth potential and/or "synergistic" effects with their current operations. So, yes, future profits.


You have to be brain dead to believe that TiVo is a good investment at this type of price.

Ignoring, again, the insulting language, I'm sure you -- with your years of investing experience -- have seen more improbable, seemingly illogical acquisitions. We could spend many days discussing the relative merits of various acquisitions (starting with, say, HP and Compaq), but again we'd be wasting our time. So I'll leave you with a single "word":


Skype.

[goony]

If DTV buys Tivo, what becomes of the S3 SA Tivo? Does DTV use the lack of an S3 Tivo (basically a recorder for cable customers) as a leverage to gain additional customers for DTV at the expense of the cablecos? What would be the future of the Tivo/Comcast DVR since it would be in the hands of a 'Comcast enemy'?

It could get pretty weird...

[ChuckyBox]

If DTV buys Tivo, what becomes of the S3 SA Tivo? Does DTV use the lack of an S3 Tivo (basically a recorder for cable customers) as a leverage to gain additional customers for DTV at the expense of the cablecos?
Since the S3 would be competitive with the cable DVRs, I would expect DTV to go forward with it, possibly with more aggressive pricing than TiVo. Murdoch has shown repeatedly that he is willing to lose money to gain customers and market share.


What would be the future of the Tivo/Comcast DVR since it would be in the hands of a 'Comcast enemy'?

It could get pretty weird...
Comcast has the right to terminate its agreement with TiVo in the event that TiVo experiences a change of control with certain specified entities. One of those entities is undoubtedly DTV.

[morgantown]

I seriously doubt that anything other than the rumor mill will ever come to be between DTV and TiVo (although I would like it since I'm a DTV sub).

Nonetheless, the patent issue is a huge one. The Echostar suit is over a very narrow issue. Any company with deep pockets that actually could come to an agreement with TiVo's board would have a field day punching holes in all non-TiVo DVR's.

The NDS DVR's have been out for many years, and all report the same problems as DTV's latest DVR. I'm not going to hold my breath on that one.

I'd rather see TiVo thrive. Too bad News Corp ever bought DTV.

[bcronin]

That seems highly unlikely - that would be an amazing admission of defeat by DirecTV. It's hard to believe that the R15 could be that much of a failure so quickly.

I think that ship has already sailed - once the Series 3 box is out, I could care less what DirecTV does, since I'll almost certainly leave and go back to cable. Tivo got me to DirecTV in the first place and Tivo will get me to leave DirecTV. :)
Ditto (especially since in mid-Feb I tried to get an HD TiVo box from DTV and found that I have (way) too many trees in the way to be able to see the extra birds I'd need to to make HD workable here, bummer). So regardless, if I want HD, I have to go back to cable (or move). But I won't go back to cable unless there is a Genuine TiVo box available.