The march to video distribution over the Internet that rivals traditional subscription pay television continues. TiVo announced an agreement with YouTube that will bring YouTube content directly to the television through a TiVo DVR Series 3 set-top-box or better. In addition to viewing YouTube content, YouTube users will also be able to log on to their account through a TiVo box. The YouTube agreement expands TiVo’s Internet video content strategy, which also includes Amazon Unbox movie downloads and a variety of other content from various sources. TiVo is trying to position its solution as a gateway to web based content, in addition to a leading DVR solution for traditional linear television content. “Being able to make available YouTube videos to the TiVo subscriber base using one device, one remote and one user interface is another major step in our commitment to combine all of your television and web video viewing options in one easy to use service,” said Tara Maitra, Vice President and GM of Content Services at TiVo Inc.

One trend that is worth observing over the coming months and years is applying the “cut the chord” mentality to cable or IPTV services, where consumers decide they don’t need cable anymore because web distributed content is enough. As more and more compelling web based content makes it to the TV in acceptable formats and viewing experiences, many consumers will surely decide that their monthly video subscription bill may not be worth it. It’s definitely having an impact on the roll out of IPTV. I’ve personally spoken with several telephone company executives who have decided to stand on the sideline and observe these trends a little more closely before deciding to pull the trigger on IPTV and triple play. This is a complicated issue, and a variety of factors come into play that will impact these decisions, including HDTV availability, sports programming, etc. It's hard to imagine Internet video distribution completely replacing the subscription pay TV model. But it is pretty clear that any converged entertainment strategy needs to address web based video. In my humble opinion, “the genie is out of the bottle” with web based video and service providers and the vendors who serve them need to find a way to weave web video options into their entertainment packages. The experience that ultimately wins will probably offer a compelling mix of both traditional and Internet delivered content. At least until the day when it will be impossible to tell the difference. That day is coming too, we just don't know how far off it is. Any guesses?

The long awaited marriage between TiVo and Comcast is official. Boston is the first market where TiVo licensed software starts appearing on Comcast DVRs. The TiVo “premium” service will cost Comcast customers an additional $2.95/month over their existing $12.95/month DVR subscription fee. In addition to standard TiVo functionality, the Comcast version allows subscribers to browse and search for content by keyword on both linear and VOD programming. The Comcast TiVo service will not offer some of TiVo’s broadband content initiatives, including Amazon Unbox. Comcast says additional markets will be coming on line during 2008.

The Comcast/TiVo alliance is a high profile tru2way partnership. True2way is the rebranded CableLabs ‘OpenCable’ initiative, whose goal is to provide a platform for easy integration of third party applications to cable networks. Comcast appears to be taking the lead with tru2way, having brought much attention to it at the most recent CES. Tru2way may prove to be quite an interesting development. If its goal of easy integration between third party developers/consumer electronics and cable networks proves to be reality, we could see a slew of innovation and new products for cable MSOs. Such a reality could offer some differentiation, and perhaps build competitive advantage for the cable industry. We’ll have to wait and see though. Even the TiVo/Comcast partnership was a long time coming. It took three years to get to market – an eternity in today’s rapidly evolving marketplace. Is it too late to matter?

Check out this Boston Globe (source for post image) post for more details about the Boston market launch.

Also, check out Will Richmond's analysis at VideoNuze.

Windstream, the wireline telco spin off from Alltel, announced a partnership with TiVo for a bundled high speed Internet and DVR combination. Windstream plans to market the interactive bundle as differentiated video service, providing broadband, access to broadband video content, and traditional DVR service for linear television viewing. TiVo offers a broad mix of broadband video content, including TiVoCast and Amazon’s Unbox service. This announcement is the second one within a week featuring a broadband TV launch for a large U.S. telco.

These deployments could be viewed as “pushing the envelope” of traditional entertainment bundles. The line between traditional multichannel video subscriptions and broadband TV appears to be graying by the week. Is it conceivable that a subscriber could choose a broadband TV enabled TiVO, over a traditional pay TV subscription? Maybe, but probably not – at least not yet. It’s more conceivable (at least in the short term) that subscribers will view this new bundle as complimentary to their subscription TV service. But as Internet content continues to flourish and search capabilities mature, an all broadband TV option may gain traction. TiVo is working to position itself as a potential solution of choice for this possibility. And telcos continue to explore the options of video services beyond traditional video subscription models. We can’t draw any firm conclusions from these trials yet. But they are interesting developments to study. We may be witnessing the early transformation of long standing video business models. Stay tuned.

TiVo announced the launch of a new HD DVR priced significantly lower at $299 than previous versions. The lower pricing is attractive, but so too is its CableCARD compatibility. The new HD DVR can also act as a set top box for subscribers, by meeting the new FCC mandate for retail set-top-boxes that are CableCARD compliant. It will be one of the first cable compatible set top box entrants in the retail space. The new box has other value add features including access to online content, particularly through TiVo’s Amazon unbox partnership. “It is the ultimate media centerpiece for the living room with the broadest selection of broadband content, right alongside your favorite broadcast and cable programs, giving HDTV viewers more choice and control than they’ve ever had before. And it can be used in place of the customer’s existing cable box,” says Tom Rogers, CEO and President of TiVo.

This new development could set up a perfect storm for cable competitors. On the surface, the box is quite compelling. It combines HD and DVR functionality with a cable set top box for a relatively acceptable price point of $299. In addition, its retail presence allows cable companies to reach a captive audience, especially among HDTV purchasers. TiVo already has established partnerships with Comcast and Cox, but this new development conceivably extends de facto relationships to other cable providers. The impact on IPTV service providers may be more acute. At least DBS has a strong retail presence and can work to counter any potential success this new device may have in the marketplace. But IPTV operators have limited retail footprints, at least as it relates to consumer electronics retailing, where that captive audience will be present. Additionally, smaller telecom service providers beyond AT&T and Verizon who offer video services are challenged with DVR and HD applications. This new competing TiVo set top box may accelerate the competitive disadvantage faced by smaller IPTV operators who have limited DVR and HD options.

Amazon and TiVo now offer direct downloads of Amazon Unbox movie titles to series 2 and 3 TiVo DVR’s, without the need for a PC (although a broadband connection is required). TiVo and Amazon had already partnered for the delivery of movies, but a PC was previously required. This move further illustrates the accelerating trend of Internet delivered content to the television without the need for a PC in the home and the bypass of video service providers. Consumers are increasingly able to view and interact with content that previously required a monthly video subscription. It will be interesting to watch how broadband providers, frequently who are also subscription video providers, react to this growing bypass trend.

The much anticipated launch of Joost has the industry abuzz. Will Joost become the ‘skype’ of the video world? Recent comments by their incoming CEO, Mike Volpi, suggest that Joost may have plans well beyond the PC. Volpi says that Joost is basically a software platform that can reside any number of places, including a set top box. The WebTVWire blog has an interesting post, ranking the possible STB partners.

So far, it seems as if Joost has done everything right. They have content partners who will share revenue. They have a decent interface for finding content of interest. Their founders have a knack for being disruptive while making money at it. Imagine a Joost/AppleTV or Joost/Slingbox partnership. I’m sure TiVo would have an interest in some Joost action too. Regardless of partner or platform, moving the Joost experience from the PC to the television creates more pressure on cable MSOs, DBS, and IPTV providers to not lose eyeballs, market share, and advertising dollars to yet another potential competitor.

The next frontier in video is search. With the hundreds of thousands (if not millions) of video programming choices now available through both television and the Internet, intuitive search capability will provide competitive advantage. TiVo has launched its initial answer to this equation - Universal Swivel Search (USS). TiVo claims to have expanded video search with USS by allowing subscribers to “seamlessly link from descriptions of one program to all others that have common elements, including program name, actors, or suggestions based on other viewers' feedback.” USS is a “TV centric” user search interface and allows search across both television and Internet based programming services that partner with TiVO, including Amazon’s Unbox video download service and others. TiVo will begin rolling out USS to its Series 2 and 3 subscribers over the next six weeks.

For more info, read this Tivo press release .

Also, check out this USA Today article.