TiVo Just Explained Why Your Cable Box Doesn't Offer Netflix Streams Quite Yet

It's always cool when two companies I own decide to work together. That's happening right now, as TiVo (NASDAQ: TIVO  ) stretched out some verbal support to Netflix (NASDAQ: NFLX  ) in last night's earnings call.

TiVo Premiere 3, featuring built-in Netflix support. Image source: TiVo

TiVo's software for set-top boxes is able to work with Netflix streams, in addition to the usual cable channels and video-on-demand options. Two European cable operators have signed up to include Netflix support on their standard TiVo-powered cable boxes. TiVo CEO Tom Rogers sees this feature as a game-changing selling point, both for cable operators and for TiVo itself.

"Our view has been that the merger of linear television and streaming over-the-top TV is where the future of television is," Rogers said. "Netflix has clearly risen to the level of a must-have on the over-the-top side. And I don't think consumers feel as if they have a full package of options until Netflix is included."

At that moment, I could feel my portfolio coming together as a spontaneous keiretsu -- a bundle of separate but related companies working together toward a common goal.

But Rogers didn't stop there. He also explained why American cable operators haven't installed Netflix apps on their cable boxes, even if they have fully capable TiVo-based software. The reasons may surprise you:

"Netflix has had studio restrictions in its library agreements that have prevented it from being distributed through boxes owned by [broadcasting services] in the United States. Generally, those restrictions don't apply internationally. So Netflix is available for international distribution through a cable operator."

Image source: Netflix.

That's the real rub. It's not that TiVo partners like Suddenlink or General Communication don't want to offer built-in Netflix features. They'll just have to wait until Netflix renegotiates its content deals to allow cable companies as distribution partners.

"Operators have had a mixed view of Netflix over the last few years," Rogers explained. "But increasingly, we're hearing operators wanting to include Netflix in their distribution. And to the extent those restrictions get worked out, we'll be in a position to help our partners implement on that front."

There you have it. Netflix wants the widest distribution possible. TiVo would love to make it happen, as it would fulfill the company's vision to be the central hub for all your entertainment needs. The cable guys see these forces coming together, but they have to wait for proper permission from Hollywood before signing anything game-changing.

And it feels pretty good to own two of these three stakeholders in the digital-media revolution.

Digital media streams: For fun and profit
The future of television begins now... with an all-out $2.2 trillion media war that pits cable companies against technology giants. Both TiVo and Netflix are betting big on this trillion-dollar revolution. The Motley Fool's shocking video presentation reveals the secret Steve Jobs took to his grave, and explains why the only real winners are these three lesser-known power players that film your favorite shows. Click here to watch today!


Read/Post Comments (1) | Recommend This Article (4)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On November 27, 2013, at 12:43 PM, AceInMySleeve wrote:

    I'm fairly certain that Hastings said those licensing issues have already been cleared up in their Q3 call.

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2745265, ~/Articles/ArticleHandler.aspx, 12/18/2014 3:43:17 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement