TiVo Inc. (TIVO) has announced that Hulu Plus is now available through subscription on TiVo’s retail Premier DVR’s. However, the financial terms of the deal were not disclosed
As an introductory offer, TiVo has announced free subscription of Hulu Plus services for six months to new customers who would subscribe for TiVo DVR’s. For the current TiVo subscribers, it has introduced a free trial offer for which subscribers have to log on to the company website for further details.
With the recent additions of a number of hit shows from Comedy Central and MTV, TiVo has evolved as a one-stop entertainment company with its patented DVR technologies and cable box facilities. Alongside, popular hit shows from ABC, FOX and NBC networks like Modern Family, Grey's Anatomy, Glee, Family Guy, The Office and 30 Rock were also made available for its subscribers.
The addition of Hulu services is expected to bring new customer wins to TiVo and also retain the existing ones that would help revenue generation in the long run. Hulu offers an extensive content streaming platform to subscribers in the U.S., including a number of classic shows such as The X-Files, Law and Order: SVU, Arrested Development, Saturday Night Live and Miami Vice, to name a few.
The online streaming market is getting competitive as larger companies are showing interest. Meanwhile, TiVo expects to gain traction in this market through strategic partnerships.
According to Interpret, a California-based research firm, data gathered from Santa Monica revealed that in the fourth quarter, streaming of TV programs increased 41%. The data also showed that the number of TV programs streamed per respondent reached nearly nine episodes in the last three months of 2010, up 37% from 6.41 programs streamed in 2009.
We have a Neutral recommendation on TiVo over the long term, driven by new partnerships with leading companies, new customer wins, product launches and international expansion, the positive impact of which is expected to be modified by increasing legal complexities, lower subscriber additions and additional debt. Additionally, TiVo faces competition from AT&T Inc. (T) and Microsoft Corp. (MSFT).
Currently, TiVo has a Zacks #2 Rank, which translates into a Buy rating in the short term.
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