TiVo Narrows Q2 Fiscal Loss

DVR pioneer TiVo is in the process of transitioning its hardware and intellectual property (i.e. patents) into separate operating businesses.

In the meantime, the current combined company continues to right its fiscal ship — narrowing the second-quarter (ended June 30) net loss nearly 54% to $9.54 million from a net loss of $20.5 million during the previous-year period.

Total revenue increased nearly 2% to $176.1 million from $172.8 million last year. Through the first six months of the fiscal year, TiVo revenue is down about 8% at $334.4 million from $362.6 million.

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The bulk of revenue comes from TiVo’s portfolio of IP patents enabling third-party pay-TV operators to offer subscribers on-demand content, video recording, content recommendation and related viewership data.

Indeed, TiVo said it has expanded its third-party advertising functionality to include promotions surrounding VOD movie transactions.

 

The company said promo campaigns deliver strong performance results, including an 81% increase in digital transactions for a Hollywood studio using the software over three weekends to promote a new movie title.

Licensing, services and software revenue increased 3% to $174.4 million, while hardware sales fell about 50% to $1.67 million.

CEO Dave Shull said TiVo remains on track to separate the businesses.

“Based on my experience with strategic transactions and operational transformations, we are making great progress on the separation of TiVo’s Product and IP Licensing businesses,” Shull said in a statement. “We remain on track to complete the separation in the first half of 2020.”

TiVo ‘Wins’ Another Round in Comcast Patent Dispute

TiVo June 4 received a favorable ruling by Administrative Law Judge MaryJoan McNamara of the International Trade Commission (ITC) that select aspects of Comcast’s cloud-based X1 video platform infringe Rovi’s patents.

Rovi, which acquired DVR pioneer TiVo in 2016 for $1.1 billion, operates under the TiVo brand name.

TiVo has a worldwide portfolio of over 5,500 patents. Patents involve advertising, analytics, DVR, guide, search and record, interactive TV and apps, AR/VR, multi-screen, parental controls, VOD/OTT, social media, sports, personalization and voice.

This was the second positive ruling for TiVo. In November 2017, the ITC issued a final ruling that Comcast had infringed two Rovi patents around ‘remote record’ functionality.

Comcast subsequently removed this feature from their products, according to TiVo.

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Then on May 23, the ITC launched a third investigation into Comcast for infringing six Rovi patents including: X1 Sports App, multi-room DVR features, and set-top box integrations of apps like Netflix.

That query has also been assigned to McNamara.

“We are thrilled by yet another legal victory,” Arvin Patel, EVP and chief intellectual property officer at Rovi, said in a statement. “We hope that today’s decision will encourage Comcast to pay the necessary licensing fees so their customers can once again access advanced cable features.”

That may be wishful thinking.

McNamara’s ruling is just one required step before the ITC can mandate Comcast make additional changes or pay license fees to TiVo – which the latter would prefer.

The cable behemoth contends TiVo’s technology is outdated and has instituted proprietary technology in the X1 platform.

In a statement, Comcast viewed McNamara’s decision a victory since the judge found “no violation” regarding two of the three other patents involved in the complaint.

“We look forward to the full commission’s review of the one remaining patent later this year, but we are confident, regardless, this ruling will not disrupt our service to our customers,” Comcast said. “We will continue to resist Rovi’s efforts to force Comcast and our customers to make unreasonable payments for aging and obsolete patents.”

 

TiVo Names New CEO, Updates Business Outlook

TiVo has named Dave Shull, former chief executive of The Weather Channel, as its new CEO, replacing interim CEO Raghu Rau, who becomes vice chairperson on the company’s board of directors.

As CEO of The Weather Channel from 2015 to 2018, Shull overhauled the organization to streamline operating costs, separated the digital assets from its television and OTT products resulting in the successful sale of its digital businesses to IBM in 2016.

Prior to The Weather Channel, Shull held various executive roles at Dish Network for 10 years. He holds a B.A. from Harvard University and an M.B.A. from Oxford University.

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“In addition to Dave’s deep experience in the pay-TV, OTT and digital media fields, he has a strong track record of driving value creating strategic outcomes and operational transformations,” Jim Meyer, chairman of the board, said in a statement.

Indeed, driving growth and strategy are just what TiVo needs as it separates its hardware and IT patent businesses.

The DVR pioneer also announced that, based upon improved visibility into its sales pipeline, it is raising fiscal 2019 expectations from those provided on May 9.

It now expects revenue of $644 million to $660 million, up from previous range of $640 million to $654 million, and a pre-tax loss of $72 million to $80 million, lowered from the previous pre-tax loss of $75 million to $87 million.

TiVo now expects Adjusted pre-tax earnings of $175 million to $185 million, up from the previous range of $172 million to $178 million.

Additionally, TiVo said it expects to repay $345 million currently outstanding on its 2020 convertible notes by the maturity date, from its cash, cash equivalents and marketable securities on the balance sheet and anticipated operating cash flow.

Finally, TiVo reaffirmed that it expects to complete the separation  of its hardware and patent software businesses in the first half of 2020.

 

 

Comcast Ending ‘Xfinity On Demand’ Access for TiVo Users

Comcast Cable reportedly is set to end access to its “Xfinity On Demand” app for TiVo devices, effective June 25.

In an email to subscribers — first reported by tech blogger Dave Zatz — Comcast said “out of date [TiVo] technology that cannot be upgraded or updated” was the reason for pending non-access.

Comcast said the shutdown would not affect recorded programming, and access to Xfinity Stream would still be available on Apple iOS, Android Xfinity apps and Xfinity website.

“VOD is also available on TiVo through Hulu, Amazon Prime Video and Vudu apps,” read the message.

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The pending shutdown comes as TiVo and Comcast remain embroiled in tech royalty disputes. The DVR pioneer in April appealed to International Trade Commission and filed litigation against Comcast alleging patent infringement on technology related to streaming video and cloud-based DVR.

TiVo, which is splitting into two separate companies focusing on patents and hardware, in 2017 received ITC backing for a complaint involving remote time-shifting functionality on Comcast’s X1 set-top devices.

It filed litigation against Comcast in April in U.S. District Court in California.

“We believe Comcast’s Xfinity X1 continues to infringe Rovi’s cloud and multi-room DVR patents – a vital component of home entertainment,” Arvin Patel, EVP and CIPO at Rovi,” said in a statement.

Rovi, which acquired TiVo in 2016 for $1.1 billion and assumed the latter’s brand name for the merged companies, claims to have invested over a billion dollars into its patent portfolio and products.

“We are extremely proud of our patent portfolio of over 1,000 issued patents in the US.,” Patel said.

Comcast, which launched much of its cloud-based X1 features via TiVo technology, claims it has developed its own tech and that most TiVo patents in question are outdated.

TiVo Expands Data Tracking Fields

As time-shifting video pioneer TiVo separates its product and IP licensing businesses into two companies, itannounced that its TV viewership data is being expanded to include third-party services Kantar ad occurrences, and Drawbridge’s Identity Graph and premium demographic attributes.

The Kantar ad data enables customers to know both the programming viewership as well as the advertising viewership across millions of U.S. households.

The Drawbridge Identity Graph enables customers to link viewership data with associated mobile ad identifiers, extending the reach and measurement of advertisements and marketing across pay-TV, over-the-top and digital platforms.

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“Household-level TV data is becoming more attractive as the advertising and media industries look to connect consumer touchpoints across screens, platforms, and campaigns across the TV ecosystem,” Ben Maughan, VP business development and data product management, TiVo, said in a statement.

“Marketers rely on Kantar’s industry-leading ad intelligence data to track competitive activity in their sector. By connecting with TiVo viewership data, we can give our customers a holistic view of what messages consumers are receiving,” said Vik Sharma, SVP for media and tech at Kantar.

“TV’s power as an awareness channel is clear, but it’s long been missing the component of identity,” added Jon DeGennaro, VP of enterprise partnerships at drawbridge. “There’s no reason why TV can’t be as targetable and measurable as other platforms and give marketers the ability to reach and report on viewership, engagement, and conversion across the entire cross-channel consumer journey. Bringing identity to TV does just that.”

With these integrations, TiVo solidifies its role as an innovator in the TV data landscape and continues to deliver improved viewership data products that are partner-agnostic and consistent with the transforming industry.

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.”

Redbox Taps TiVo for Recommendation Engine

Redbox has engaged TiVo Corp.’s Personalized Content Discovery platform, including search, recommendations and insights, to engage new customers, increase retention and enhance loyalty across Redbox.com, Redbox On Demand and physical boxes nationwide, according to TiVo.

Redbox has more than 41,500 kiosks nationwide renting movie discs and games and a transactional VOD service Redbox On Demand.

“TiVo’s platform enables more tailored recommendations to connect Redbox consumers with the content they love, across viewing devices,” according to the TiVo press release.

Redbox will also enable TiVo’s Video and Video Game Metadata, including access to TiVo’s library of enhanced entertainment metadata and high-resolution imagery, to further personalize content discovery, according to the release.

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“We are excited that Redbox has selected our technology to give their customers a highly personalized, feature-rich entertainment experience they can enjoy across all of their devices,” said Walt Horstman, SVP and GM, advanced media and advertising, TiVo. “Redbox is fully utilizing our Personalized Content Discovery platform and showcasing how it can be used in many non-linear environments, including redbox.com, their mobile apps, and physical boxes throughout the country.”

“With TiVo’s Personalized Content Discovery platform, we are able to offer our consumers a more engaging and relevant entertainment experience across multiple devices,” said Ash Eldifrawi, chief marketing and customer experience officer at Redbox. “We’re gaining a more holistic view of all of our audience metrics, helping us align our data and insights across all devices and platforms, ultimately allowing us to grow our business.”

TiVo Inks Software Deal with Anime Provider Funimation

TiVo March 14 announced it is licensing software to Funimation, the anime content provider and a subsidiary of Sony Pictures Television. The software includes TiVo branded content search and recommendation technology.

The software will enable Funimation to test, manage and fine-tune search and recommendation performance in real-time to help improve the user experience and generate more engagement from viewer searches.

The software is now fully operational on Funimation’s website and on Funimation Now, the company’s streaming video platform, as well as across a wide range of over-the-top video platforms, including Apple TV, Google Chromecast and Roku streaming devices.

As part of the agreement, TiVo is also providing Funimation with an integrated product and merchandise search function that provides a single landing page for both viewable programs and relevant ecommerce merchandise including DVDs.

“Funimation provides an opportunity to showcase our personalization technology for content providers to help them make the consumer entertainment experience more engaging and streamlined,” Sean Moore, VP, content provider accounts, TiVo, said in a statement. “Through features like ‘More Like This,’ viewers will no longer have to search for content they might like; the content will now find them.”

 

TiVo Balloons Fiscal Loss, Eyes Splitting Business

DVR pioneer TiVo reported a fourth-quarter (ended Dec. 31, 2018) loss of $288 million, compared with income of $18 million during the previous-year period. Revenue fell 22% to $168.5 million, from $214.2 million a year earlier.

For the fiscal year, revenue dropped 16% to $695.8 million, from $826.4 million in 2017.

TiVo attributed much of the loss to a goodwill impairment charge of $269 million in its “product reporting” business unit.

Interim CEO Raghu Rau tried to put a positive spin on the results, saying TiVo continues to ready an undisclosed “unique entertainment discovery experience,” that it showcased at CES in Las Vegas and “received very promising feedback.”

Rau said TiVo plans to launch the “Internet age” product in the second half the year.

“We are very excited about the prospects for our long-term growth strategy,” he said.

The executive admitted that ongoing internal review of strategic alternatives for TiVo’s product and IP licensing businesses “is taking longer than we hoped.”

Indeed, quarterly revenue from IP licensing to pay-TV operators plummeted nearly 50% to $42.3 million from $83.6 million last year. IP licensing to CE manufacturers fell 31% to $8.9 million.

The increase in revenue from new media, international pay-TV providers was primarily due to a $5.7 million increase in catch-up payments.

“We have proactively begun working … on preparing for the possible separation of the two businesses to help address some of the complexities and potentially facilitate strategic transactions,” Rau said.

He said the company hopes to shed further light on strategic plans with the goal of driving shareholder value.

“We look forward to providing additional information by our first quarter earnings call,” Rau said.

 

 

TiVo: Netflix ‘Essential’ to 52.7% of Consumers

With more than 58 million domestic subscribers, Netflix is considered “essential” among consumers to their entertainment consumption, according to new data from TiVo.

The SVOD pioneer (52.7%) topped YouTube videos (45.9%) and cable TV (39.5%) as the primary source for home entertainment, according to a survey of 4,458 adult respondents in the United States and Canada conducted in the fourth quarter of 2018.

Just over 40% of respondents selected cable TV as supplemental to their home entertainment needs, suggesting consumers are divided in their loyalties to pay-TV, according to TiVo. This split doesn’t exist for Netflix, which is considered supplemental by only 30% of respondents.

The report found the average household among survey respondents used 2.75 media services in 2018 — up 26% since 2017.

“Live TV is still favored, but content providers such as Netflix and YouTube are gaining ground,” wrote TiVo.

The DVR pioneer, which has conducted its “TiVo Trends” media analysis since 2012, found that combining Netflix with Amazon Prime Video and pay-TV was a favored (10.6%) bundle among consumers. Other bundle options included Facebook, YouTube and pay-TV (7.5%) and YouTube, Netflix and pay-TV (7.5%).

Indeed, Comcast now offers direct access to Netflix, YouTube and Amazon Prime Video for Xfinity X1 subscribers. TiVo said 63.6% of respondents watch one hour or more of live TV per day, which tops OTT video (52.2%), recorded programming (51%) and live sports (45.6%).

“Clearly, consumers are still turning on their TVs and watching live content every day,” wrote TiVo.

The report found 69.3% of respondents use over-the-top video services while 30.7% do not. Among OTT video users, Netflix (50.4%) and Prime Video (21.8%) lead the pack among streaming video platforms.

Other included YouTube TV (11.9%), Hulu (9.5%), HBO Now (7.5%), Hulu with Live TV (6.9%), DirecTV Now (6.3%), CBS All Access (5.2%), PlayStation Vue (4.4%), Showtime OTT (4.1%), Starz (3.6%) and Sling TV (3.2%).

 

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