TiVo will offer its digital video recording service in Japan as early as next year, possibly by partnering with local companies, the Nihon Keizai Shimbun reported on Monday, quoting TiVo CEO Michael Ramsay. TiVo, a California-based company whose recording systems let users customize television viewing with features such as pausing live shows while continuing to record them, will form a Japanese unit soon and begin operating in that market as early as 2006, the paper said.

TiVo has more than 3 million subscribers in the United States but would face stiff competition in Japan, where companies such as Matsushita Electric Industrial's Panasonic brand have sold large numbers of DVD recorders with similar functions.

Additionally, TiVo has been facing challenges--the company has lost its president, is looking for a new CEO, and faces tough competition from digital video recorders, or DVRs, provided by cable companies.

The Nihon Keizai quoted Ramsay as saying it would be desirable for TiVo to partner with a strong Japanese service provider, suggesting the company may form an alliance with a cable TV network or Internet service provider.

TiVo may also join hands with a Japanese electronics manufacturer to procure hard drives, the newspaper added.