Did DIRECTV Try to Buy TiVo?
Did DIRECTV Try to Buy TiVo?: Phillip Swan reports that Rupert Murdoch tried to buy a controlling interest in TiVo.
“Murdoch’s News Corp. purchased a controlling interest in DIRECTV in late 2003. Soon after the paperwork was dry, Murdoch made an offer to buy a similar controlling interest in TiVo, TVPredictions.com has learned. The media mogul advised TiVo that it would be in its best interest, considering that DIRECTV was generating approximately 70 percent of the DVR service’s new subs. What would happen if DIRECTV was suddenly no longer your partner? TiVo was asked.
Despite the implicit threat, TiVo’s top management did not like Murdoch’s offer. Under the plan, News Corp. would effectively have control of the company, although it was offering to purchase less than a majority stake. (Similarly, News Corp. purchased a controlling interest in DIRECTV, but owns just 35 percent of the company.) TiVo felt that Murdoch was trying to get the company on the cheap.
In addition, TiVo executives were concerned that the DIRECTV deal would forever prevent it from aligning with the cable TV industry and reaching a mass audience. DIRECTV now has more than 14 million subscribers, but cable operators reach nearly 70 million homes.
So, TiVo said no. However, you don’t say no to Rupert Murdoch without consequences.
Soon after, DIRECTV chairman Eddy Hartenstein resigned from TiVo’s board of directors. Then, DIRECTV sold its entire equity stake in TiVo, which first led to rumors that the two companies were on the outs. And finally, DIRECTV announced at the January 2005 Consumer Electronics Show that it would launch its own DVR service, separate from TiVo.”
Although I would have rather seen a little more actual evidence than, “Murdoch made an offer to buy a similar controlling interest in TiVo, TVPredictions.com has learned.” It is interesting speculation.
With Rupert’s ego I could see him reacting the way DirecTV has, like a jilted lover, out of spite.
I just hope that the DirecTV-TiVo customer doesn’t lose out over what Swann alleges as Murdoch’s spite. I’ll be pretty upset if they decide not to support my HDTV TiVo’s ability to watch network high def later this year.
Very interesting commentary and analysis by Swann but still I wish there was some way he could better substantiate his claims other than “TVPredictions has learned.”