• by Paul Gough , January 9, 2003

TiVo announced a raft of new products Thursday afternoon that move the company into a new area with a product that will combine DVRs with a home entertainment center.

The San Jose, Calif., company unveiled the TiVo Home Media Option, a premium service which it said is designed to transform Series2 units into a home networking system for digital video, music and photographs throughout the home. For instance, it will allow TiVo users to stream JPEG and MP3 content stored on their PCs to TiVo units throughout the house. Content from select providers can also be downloaded through exclusive deals with Universal Music and Corbis.

“It’s really an important event for our company. Clearly we’re moving beyond DVR,” said TiVo President Mike Ramsay.

Ramsay said the TiVo Home Media Option – including a one-time fee for the first TiVo unit and another for each additional unit in the house – reflects the company’s understanding of a changing environment for home entertainment. He said consumers are moving their music, video and photographic collections to their PCs and going online to get content.

“It’s driving broadband and Internet access, so the PC, while it’s not much of a media player, has a vital role to play … We’re leveraging the power of the PC,” he said.

Another feature of the upcoming service allows users to program their TiVo from anywhere via the Internet. He said that and the other services was clearly a direction that TiVo users wanted the company to go in.

“We’ve become real believers in broadband and home networks,” he said.

Ramsay expects the home-media services to be up and running by April.

“It’s something that we’re going to be developing more over time,” he said.

The announcements were made Thursday at the International Consumer Electronics Show in Las Vegas. TiVo also announced it was creating a platform to allow DVRs to record in high-definition television. The company said the feature was among subscribers’ most frequently requested innovations.

“High-def has arrived. It’s important for us to be on the leading edge of this development,” Ramsay said. Deals with DirecTV and Toshiba were also announced.

Ramsay also said TiVo had a half-million subscribers (and about a million viewers) and planned to have a million subscribers and two million viewers by the end of the year. He said the company hoped to break even in the first quarter and had tripled revenues. He said the company was pleased by its efforts in the advertising space, with viewer-controlled interactive promotional areas that offer high-quality video content and leverage advertisers’ assets.

He said the ads don’t interfere with the viewing but work best when they’re fun and entertaining. He said promotions for movies and music, including The Lord of the Rings’ second installment and the latest Austin Powers movie, have benefited the most from TiVo exposure. In the case of the content from Goldmember, Ramsay said 66% of TiVo viewers saw the ad and spent an average of 5-7 minutes with it.

“That’s a huge statement of the popularity of this kind of promotion,” he said.

Ramsay said that 2002’s advertising efforts were in the experimental stage but that 2003 will be a year when they can generate “meaningful” revenue from ads. He said once TiVo crossed the million viewer point, it started a new wave of interest among advertisers.

“We’ll see how it goes. It’s too early to tell,” he said.