TiVo has several answers this afternoon for investors wondering how the DVR pioneer plans to grow in a period when Comcast and other major pay TV providers worry about cord cutting — and hope to slow it by promoting their own next generation video technologies.
TiVo will head back to court, this time with a patent infringement suit against Samsung. Its DVRs improperly use TiVo’s processes that enable viewers to watch one show while recording another, the company says. Over the last few years TiVo prevailed in a series of suits and settlements with Google, Cisco, Time Warner Cable, AT&T, Verizon, and Dish Network.
The new charges against Samsung stand out because they involve patents that run to 2021 and 2023, unlike previous cases mostly based on ones that expire in 2018. It’s a “significant lawsuit,” CEO Tom Rogers tells me, because “Samsung is a major DVR supplier to the cable industry” — and the charges also cover processes on its mobile devices.
The announcement came as TiVo announced a technology deal with the National Cable Television Cooperative, and released earnings for the July quarter that it says shows the success of similar alliances with small and mid-sized pay TV providers in the U.S. and abroad.
TiVo’s share price is down more than 23% so far in 2015 — but rose 2.9% during the trading day today after the company unveiled a NCTC deal. The stock is flat in post market trading.
The company reported net income of $8.3 million, down 10.4% vs the period last year, on revenues of $119.5 million, up 6.8%. The top line was well ahead of the nearly $96 million that analysts expected. Earnings at 9 cents a share matched the Street’s consensus forecast.
TiVo also says that the number of global homes with a device it powers increased 25.7% to more than 6 million, mostly due to its growing aray of cable alliances.
Paradoxically, the growth of cord cutting could help TiVo, Rogers says. To slow the trend, many will turn to it for help as it has “become the leader in providing advanced television to cable.”
The new agreement with NCTC illustrates that, he adds. It will offer TiVo’s technology to 850 small and mid-sized cable operators looking for an economical way to blend traditional pay TV and TV Everywhere streamed offerings with online video from Netflix and other services.
“NCTC is investing in a common back office integration platform that will connect with multiple billing systems as well as TV Everywhere authentication platforms,” says NCTC chief Rich Fickle. “This is a key enabler of the TiVo deal and could also support future IP video and OTT solutions. We are excited to work with TiVo and believe our members are now better positioned to address a growing array of options for receiving television content.”
Meanwhile, Rogers says that investors are giving TiVo virtually no credit for its ad data business — another service that could help pay TV fight a worrisome trend. Ad dollars are shifting from TV to digital platforms, which offer more precise data about viewers and their buying habits. That puts TiVo “smack in the limelight” with similar information about TV watchers, the CEO says. Viacom and ad agencies are among his company’s customers.
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