Best Buy, TiVo Form Strategic Alliance

By Alan Wolf -- TWICE, 7/9/2009

Minneapolis - Best Buy has entered into a strategic alliance with TiVo that will allow it to deliver digital content services and advertising directly to homes.

The partners described the alliance as "a major step intended to accelerate [Best Buy's] evolution in digital media and better serve the needs of its customers."

The new platform will be used to convey educational and marketing messages, promote Best Buy's private-label line, and possibly sell products directly, the companies said. The conduit could also carry the fruits of Fuse, Best Buy's new media venture fund that is investing in music, video, gaming and personal media management.

The move dovetails with Best Buy's plans to reconfigure its stores in a way that emphasizes connected services.

As part of the agreement, the partners plan to investigate development of a unique user interface for TiVo DVRs purchased at Best Buy. The platform would allow the chain to more effectively market its digital content services, offer consumers advice and guidance on the digital home experience, and to provide an ongoing dialogue with customers about its various retail offerings, the companies said.

"Best Buy and TiVo together will open up a variety of new ways for consumers to get the most out of their entertainment experience, have more digital content choices, and get on-demand access to Best Buy's trusted perspective in consumer electronics," said Chris Homeister, the retailer's entertainment senior VP.

Barry Judge, Best Buy's chief marketing officer, added that the alliance "will open a new channel of customer interaction" as consumers continue to find new ways to access information and interact with trusted brands.

Best Buy said it selected TiVo for its ability to deliver "millions of pieces of content ... spanning broadcast to broadband," and to create a user experience based on a single box, remote and user interface that's easy and intuitive for consumers.

"We could not be more gratified with this important relationship with Best Buy, which is the world's leader in retail consumer electronics," said TiVo president/CEO Tom Rogers.

Among the key elements of the TiVo-Best Buy strategic alliance:

Best Buy will seek to drive increased TiVo DVR sales through significantly increased levels of marketing and merchandising;

TiVo and Best Buy plan to investigate development of user interface features for TiVo DVRs sold by Best Buy that will provide a means of ongoing dialogue with consumers and enable easy access to Best Buy's growing assortment of digital services;

Best Buy will have access to TiVo's full suite of interface solutions including consistent presence in the TiVo Showcase area of the TiVo platform, providing it with a powerful communication tool for marketing innovative products to the TiVo subscriber base;

TiVo intends to work with Best Buy's private-label group to explore integration of its user interface, search, and other TiVo benefits to help further grow that consumer electronics line;

Best Buy and TiVo will investigate development of a series of consumer tips and insights that can be easily accessed for all kinds of digital home experiences, and Best Buy expects to explore opportunities with TiVo to provide unique Best Buy solutions that enable viewers to take greater advantage of transactional opportunities through the television set; and

Best Buy expects to explore opportunities with TiVo to develop new features and offerings to ensure that the TiVo-Best Buy platform is at the forefront of new digital home entertainment offerings.