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TiVo Extends Its Antenna

The company makes a bid for the video-sharing generation.

The video-sharing revolution did wonders for You Tube. Can it help revive the TiVo (TIVO) - Get TiVo Corp. Report magic?

The digital video-recorder pioneer said Tuesday it will let subscribers transfer broadband video from their PC to their television sets, even if those videos didn't originate in a television format. The service will come through an expansion of its Desktop PC software later this year, which will be available to users for $25.

TiVo's attempt to marry television and the Internet is yet another sign that the company intends to stay ahead in the consumer entertainment business. And investors appear to be on board. Shares of TiVo were up 27 cents, or more than 4.5%, to $6.19 in recent trading.

"TiVo remains the innovator with the TV experience, and as they integrate more Internet capability and file-sharing between users, it can only help the company's long-term prospects," says Fredrick Moran, a media analyst with the Stanford Financial Group. The group does not have a banking relationship with TiVo.

TiVo's move is a play to ride off the explosion in noncopyrighted video content on the Internet, a phenomenon that video-sharing site YouTube leveraged enough to make the two-year old start-up worth $1.6 billion in a buyout by


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But TiVo's stock has been in a funk for the last few weeks, with shares down nearly 18% since Oct. 3, almost wiping out gains since the beginning of the year.

Weighing on the stock has been an ongoing patent war between TiVo and

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EchoStar Communications

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. TiVo filed a patent infringement lawsuit against satellite TV provider EchoStar in 2004. TiVo has won the initial rounds, but last month the Supreme Court allowed EchoStar to continue offering its services to users. The uncertainty around the patent fight is turning investors away, says Moran.

"TiVo recovered meaningfully when it won the patent suit against EchoStar but since then the case has been bogged down in the appeals process and that is having an impact on the stock," says Moran.

Meanwhile, TiVo's fundamentals have been shaky. The company's subscriber growth has moderated and TiVo faces increasing competition, especially from cable operators that offer a free DVR.

Still, TiVo may become a strong long-term play, says Moran. The TiVo brand and its ability to continually innovate should help the company. And once the patent lawsuit against EchoStar is sorted out, the tide could turn in TiVo's favor.

TiVo's latest offering is in addition to the broadband programming that is delivered through its TiVoCast direct-delivery feature. "Broadband video is growing rapidly on the Web, but the television will continue to be the key way viewers want to watch video," says Tom Rogers, president and CEO of TiVO. "It's not TV until it's on TV."

In its latest move, TiVo said subscribers will be able to choose from a variety of free downloadable content such as music videos, video podcasts and user-generated content. TiVo already lets subscribers access local movie listings, purchase tickets, discover new music, and view shared