DirecTV buys ReplayTV

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DirecTV purchased ReplayTV, the company that, along with TiVo, invented the DVR but was nearly sued out of existence. The parties would not disclose the price tag Thursday.

DirecTV purchased the assets of ReplayTV from D&M, a Tokyo-based consumer electronics company that bought ReplayTV from SonicBlue, which bought the company in 2001, four years after it was founded.

ReplayTV battled TiVo for supremacy in the late 1990s, and lost, and was nearly driven out of business in 2002 when television broadcasters and movie studios sued it over its ad-skipping features and ability to copy and share content.

D&M acquired ReplayTV, along with the digital music player Rio, for about $36 million after SonicBlue filed for bankruptcy in 2003.

D&M said it will continue servicing existing subscribers while DirecTV assumes ReplayTV's other assets. ReplayTV for a few years now has been focusing on its DVR software as opposed to standalone DVR set-top box hardware.

DirecTV woudn't say what it intends on doing with the ReplayTV business, but it already uses DVR players made by NDS Corp.

"No decisions have been made concerning the integration of Replay technology with our existing platform," a DirecTV spokesman said Thursday.

Some observers speculated that the purchase is somewhat of an insurance policy, considering the way TiVo has been dogging EchoStar Communications over the DVRs used by its Dish satellite TV network.

TiVo successfully sued EchoStar and the company would have had to disable its customers' DVRs if not for a judge staying an injunction while the patent suit was appealed. That appeals process has winded down and a decision is expected within the next three months.

TiVo and ReplayTV had once struck a truce in regard to suing each other over DVR patents. TiVo, which once had a marketing arrangement with DirecTV, has also agreed not to sue DirecTV, though that deal expires in 2010.

DirecTV stopped using TiVo in favor of DVRs from NDS since shortly after News Corp. took control of DirecTV, since NDS is also controlled by News Corp. But DirecTV is being sold to Liberty Media and TiVo CEO Tom Rogers has expressed some confidence that a DirecTV-TiVo relationship could be rekindled once the Liberty deal closes.

Such hopes, though, might have been dashed by DirecTV's purchase of ReplayTV, some observers speculated. On Thursday, TiVo shares fell 1%, while DirecTV shares fell fractionally and EchoStar shares fell 2.4%.
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