Seven of the top 10 cable operators already use Digitalsmiths’ service, the companies say in this morning’s deal announcement. The technology powers TV Everywhere video discovery for set top boxes and consumer electronics devices using iOS and Android as well as Roku, Xbox, PlayStation, and Kindle. What, exactly, does it do? The official boilerplate sounds a little creepy, but here it is: Digitalsmiths “offers personalized video search, recommendations and browsing, social trending, and mood-based discovery which can be used to instantly connect consumers to the most relevant movies, TV shows and live events available, at any time, on any screen including set-top boxes, tablets, smart phones, computers and gaming consoles.” In any event, TiVo CEO Tom Rogers says that the deal “opens new opportunities to commercialize and deploy TiVo’s cloud based services and technologies to operators, in an extremely cost effective way that can be offered either independently or in conjunction with TiVo’s renowned user interface.” What’s more, the deal could open doors for TiVo with large pay TV distributors. Up to now it has been most successful offering its DVRs and technologies to small and medium sized operators that don’t have the wherewithal to provide the state-of-the-art services available from big fish led by Comcast. TiVo tells shareholders not to worry: The deal will “help accelerate TiVo’s long-term Adjusted EBITDA [cash flow] growth.” Also helping the bottom line: Digitalsmiths has more than $20M in losses that TiVo can use to lower its tax bills. Still, Rogers sweetened the pot for investors: TiVo added $100M to its stock repurchase effort, which it plans to spend early this year. Its shares are up 2.4% in early trading.
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