Best Buy will advertise its products and services through TiVo DVRs as part of a deal between the two companies.
The agreement, reported by the New York Times, will see heavy promotion for TiVo products in Best Buy's 1,100 U.S. stores. In exchange, TiVo will develop a version of its set-top TV recording box specifically for Best Buy.
As for the in-home advertising, it's not known exactly what Best Buy has in store. The Times says TiVo users will be able to purchase Best Buy products directly from the DVR and seek advice on products and services. The companies didn't disclose the financial details of the deal.
Previously, TiVo faced a conflict in marketing. As a cost-cutting measure, the marketing budget fell from $9 million in 2007 to less than $1 million last quarter, but the effects were felt in subscription losses, from 1.727 million in 2007 to 1.6 million in April. Other DVRs sprung up, and TiVo wasn't communicating its extra features, such as Netflix integration and the ability to purchase movies directly from Amazon.
This deal gives TiVo a new avenue for marketing, but presumably without the expenses. The intrusion of Best Buy advertisements, however, is an added burden. Certainly some users will see this addition as a useful improvement, but others will recognize them as commercials in a product they are already paying for. I won't predict whether this move will hurt subscription levels, but if I were a subscriber, I wouldn't be happy about it.
