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EXCLUSIVE: Foxtel Look To TiVo For New Box To Replace Q3

The sale of TiVo to Rovi, could have a silver lining for Foxtel, who are desperate to find a solution to their problem plagued Q3 set top box.

Late last month we exclusively revealed that Foxtel was warehousing over 125,000 dead Q3 boxes and that the Company had recently stopped supplying the Q3 set top box to consumers.

Now we can reveal that Foxtel is discussing the concept of a new box that will have TiVo middle ware and Pace hardware.

Pace were the originally supplier of the Q3 box.

We have also been told that News Corporation and Telstra, who between them own 50% each of Foxtel, along with Foxtel management, at one stage looked at the idea of buying out arch rival Fetch TV who is currently going through a major growth spurt in partnership with Telstra arch rival Optus.

According to high level sources the idea was “knocked on the head” when lawyers indicated that there would be “little chance” of the Australian Competition and Consumer Commission approving the deal.

What appealed to Foxtel management was the Fetch TV box which is significantly superior to the Foxtel offering.

While no contracts have been signed the concept of a TiVo powered set top box is appealing to Foxtel management say sources.

Launched back in 2007 TiVo was a disaster in Australia, under the management of Robbee Minicola who was then CEO of CEO of Hybrid TV, the creators of CASPA On-Demand and the exclusive licensee of TiVo for Australia & New Zealand TiVo despite a multimillion dollar marketing campaign in Australia failed to take off due to poor management and a lack of content.Premiere_front

Last week Rovi Corporation who license their TV Guide to Foxtel announced that they would buy in a $1.1 billion deal that brings together two video software players with deep patent portfolios.

Rovi Chief Executive Tom Carson said that he had been looking at a merger of the two Companies from when he took over as CEO four years ago.

Both companies have a lot in common. Both sell products and own intellectual property for digital guides on televisions, set-top boxes and video recorders, something that appeals to Foxtel who are desperate to fix their software problems.
The companies said in a news release it would now serve 500 service providers globally and own 6,000 patents.

TiVo, is known for its devices that can record and stream television, Foxtel is hoping that TiVo middle ware software is a solution that will fix the Companies problems. The combined company will take the TiVo name and be led by Thomas Carson, the chief executive of Rovi.

“By working together, Rovi and TiVo will revolutionize how consumers experience media and entertainment, and at the same time build value for our stockholders,” Mr. Carson said in a statement on Friday.

The TiVo of today is not merely the device that rose to popularity in the early 2000s by giving TV watchers the ability to fast-forward through commercials. TiVo technology has gained traction with cable operators around the world because it can also stream video from sites like Netflix in their own boxes. Many of the larger cable providers, however, have opted to create their own versions of TiVo rather than work with the company.

Under the terms of the deal, Rovi will pay about $10.70 per share in cash and stock. TiVo shareholders will receive $2.75 per share in cash, and the remaining $7.95 will be paid in common stock of the combined company.

Recently Peter Tonagh the new CEO of Foxtel recently admitted that complaints, that Foxtel, who started life on the premise that they would be advertising free, now carries too many advertisements is “a real challenge” for the pay TV provider.

The Foxtel CEO says it is an unavoidable function of the industry’s 30-minute schedules and predicts moves to deliver more targeted advertisements to households will reduce viewers’ “frustration”, currently the pay TV supplier deliver more than 6.7 minutes of advertising every hour.

Arch rivals Netflix and Stan deliver no advertising.

“What I would like to see in the longer term is more targeted and addressable advertising,” he said.

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