TiVo ARMs Itself

It's nice to see TiVo (NASDAQ:TIVO) moving and shaking again. Last week heralded announcements of several new deals that could fast-forward the DVD pioneer's fortunes by broadening both its features and its potential customers.

It's not just about Nielsen ratings anymore -- TiVo is gearing up to cut out the middleman. Its new Audience Research and Measurement (ARM) division will analyze viewers' habits as they time-shift their favorite TV shows. The ARM unit will be able to determine which ads hit it off with TiVo viewers -- a doubtlessly compelling product for advertisers as they navigate the tricky waters of modern TV viewership. (TiVo arguably churned up those waters when it introduced its commercial-skipping, viewer-empowering video recorders in the first place.)

TiVo has long had the capability to monitor viewers' choices. Back in 2004, TiVo users hit rewind to see Janet Jackson's Super Bowl wardrobe malfunction just one more time. The incident caused "viewership [to spike] up to 180 percent as hundreds of thousands of households used TiVo's unique capabilities to pause and replay live television to view the incident again and again," the company said at the time. TiVo said it will base its ARM data on monitoring 20,000 random users per day.

TiVo said it already has two clients, Nissan and OMD NEXT, an advertising agency that boasts corporate-heavyweight clients like General Electric (NYSE:GE), Anheuser-Busch (NYSE:BUD), and McDonald's (NYSE:MCD). Personally, I'd like to see the data myself, just out of curiosity -- I have some absolute favorite ads I like to fast-forward through, usually while muttering colorful expletives.

In more good news, TiVo has penned a co-marketing agreement with telecom heavyweight BellSouth (NYSE:BLS). Through the agreement, the stand-alone TiVo box will be marketed at a special price to some BellSouth customers in the southeast U.S. who have BellSouth's FastAccess DSL. We've all long known that TiVo had to increase the channels through which potential customers learned about its service, especially with cable companies hot to bundle their generic DVRs in their own service plans. Needless to say, BellSouth, which is currently in the process of merging with AT&T (NYSE:T), is a major telecom name, giving TiVo some significant exposure.

I certainly can't say that TiVo isn't still risky, but things are definitely looking much better than they did at the start of this year. The company seems to be making all the right moves, and developments like these -- increased exposure and the possibility of additional revenue channels from advertisers who are extremely interested in gaining intelligence on their campaigns -- certainly gives investors more reason for optimism. Although at some point, investors will demand more profitability than promise, right now TiVo's moving quickly and nimbly to improve its long-term outlook.

Time shift some TiVo news and take a look at these recent articles:

• TiVo said it's in a full Nielsen.
• Has TiVo won?
• Rewind to TiVo's most recent quarter.

TiVo is a Motley Fool Stock Advisor recommendation. Anheuser-Busch is a Motley Fool Inside Value recommendation.

Alyce Lomax does not own shares of any of the companies mentioned.