TiVo Bringing Ads to DVR Content

TiVo popularized the digital video recorder (DVR), enabling TV viewers to record and playback programming.

Now the company wants users to watch ads before viewing their time-shifted content. TiVo plans to roll out so-called “pre-roll” ads on all recorded content within 90 days.

The move underscores the ongoing value of advertising in an over-the-top landscape that eschews them. For TiVo, which now operates as two separate companies focusing on software IP and hardware, respectively, ad-insertions open up a new revenue opportunity.

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“DVR advertising is going to be a permanent part of the service,” a company representative told LightReading.com, which first broke the news.

The company, which began testing the concept with its TiVo Experience 4 device, will roll out the ads to all TiVo DVRs.

“We’re dedicated to innovation that helps our customers stay in control of how, when, and what they watch,” TiVo said.  “Advertising is an important part of every media business and TiVo is investing in new advertising experiences.”

The company also said it designed the new DVR advertising software with the ability to ‘skip’ ads anytime a customer chooses to.

Some media reports said users attempting to bypass ads found the process more complicated than simply pushing a button.

Regardless, TiVo, which saw a 9% drop in second-quarter (ended June 30) platform revenue, in addition to a $9.5 million operating loss, said the ad-insertions would help stabilize operations.

“This is part of our ongoing commitment to bring our users the best media discovery experience possible,” the company said.

 

TiVo Splitting into Two Companies

Time-shifting video pioneer TiVo is separating its product and IP licensing businesses into two separate companies.

TiVo’s said its board concluded the separating would be the best strategy to maximize shareholder value. The company intends to spin out its DVR-based hardware business to shareholders. Throughout the separation process, the board would seek “strategic” transactions for each business that could create additional stockholder value.

“Operating independently, these two businesses will have increased flexibility to pursue new and growing market opportunities,” Raghu Rau, Interim CEO, said in a statement.  We believe this separation is the best way to maximize shareholder value, while also enhancing the possibility of value-creating strategic transactions.”

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TiVo expect to complete this transaction in the first half of 2020 through a spinoff of the product business to shareholders.

The product business offers software technologies video service providers or retail markets. At the end of 2018, there were an estimated 23 million households worldwide utilizing our TiVo software. The product segment generated $401 million in revenue, with a large component of recurring revenue.

TiVo believes the separation would “open” its product business up to greater receptivity from service providers, content providers and device manufacturers, as well as potential customers in new markets.

The unit is planning several new product and business model launches later this year, including creating a new content network with increased monetizable opportunities through advertising.

TiVo’s branded IP portfolios (including Rovi) encompass about 5,500 patents and pending applications worldwide. Licensees include traditional and new media video providers across pay-TV, over-the-top video, mobile, CE and social media markets. Licensing revenue reached $295 million in 2018, with a high percentage of this recurring revenue.

“As video consumption continues to shift beyond traditional pay-TV into Internet, social media and mobile domains, we believe it is important that the licensing business can diversify … into new consumer applications and functionalities,” Rau said. The separation will enable the IP business to strategically reinvest in its own business, not only to solidify its strong, existing foundation, but also to appropriately pursue new long-term growth opportunities.”