America Online has formed a strategic deal with personal video recorder (PVR) company TiVo to become the exclusive supplier of PVR functionality for AOLTV, its interactive TV platform. Under the three-year deal, AOL will invest $200 million in TiVo and receive warrants to purchase additional TiVo shares. The companies will work together to create a dual-purpose AOLTV-branded set-top unit featuring TiVo's PersonalTV Service. The box is targeted for delivery in early 2001.
A likely manufacturer is Philips, which already has a deal to make the dial-up set-tops for AOLTV and was the original manufacturer of TiVo PVRs. Philips is also working with TiVo and DirecTV to introduce TiVo-enabled DirecTV receivers, and AOL is working with DirecTV to launch an AOLTV set-top.