TiVo will set aside research and development dollars in the year ahead as the company considers whether to pursue a product strategy centered on the Reference Design Kit, a pre-integrated software bundle for IP-connected set-tops and gateways that’s being pursued by some of the world’s largest cable operators.
“We have had a number of [cable operators] ask us to think about the RDK and talk to them about how our plans could dovetail with RDK deployments,” Tom Rogers, TiVo’s president and CEO, said last week in an interview with Multichannel News. “It’s becoming more part of our overall R&D planning as we continue with those discussions.”
Aimed at accelerating product development cycles and achieving a level of openness among set-top vendors, the RDK relies on a common set of software components. The RDK, now managed by Comcast and Time Warner Cable, has already attracted more than 80 licensees, including box suppliers such as Arris, Cisco Systems, Humax and Pace.
Pursuing an RDK strategy could help TiVo port its user interface and apps to boxes and gateways that adhere to the platform and, perhaps, put it in a better position to win business with major cable operators that are using or planning to use the RDK.
Comcast already uses RDK-powered boxes for its new X1 platform, and Time Warner Cable plans to adopt the RDK in its new generation of video hardware. Liberty Global, which has a relationship with TiVo by way of Liberty’s recent acquisition of U.K.-based operator Virgin Media, plans to lean on the RDK for a new cloud-based interface that will work with its IP-capable “Horizon” video platform.
“Obviously [the RDK] is an area that Liberty Global is particularly focused on,” Rogers said. “Therefore, it’s a very important way that we can look to foster a further relationship with them.”
TiVo hasn’t cemented an RDK product plan, but this marks the first time the company has shown outward interest in it. Historically, Pace has relied on its own Hardware Porting Kit to deliver its UI and apps on third-party hardware. Pace, Cisco, Samsung and Technicolor have licensed TiVo’s HPK.
Elsewhere, Rogers said TiVo’s relationship with Charter Communications remains in a holding pattern as the cable operator pursues a cloud-based UI that can run on its legacy set-top base and an IP-connected “World Box” that’s under development. Charter had offered leased TiVo Premiere HD-DVRs in one market, Ft. Worth, Texas, but stopped supporting that option in September.
“The bottom line is we’re still in discussions with them,” Rogers said of TiVo’s relationship with Charter.
FINANCIAL SNAPSHOT
TiVo added a record 295,000 subscribers from its pay TV partnerships in the third quarter, ended Oct. 31, extending its total subscriber base to 3.9 million, up 32% year-over-year. The company ended the period with 960,000 direct subscribers and 2.93 million subscribers via its MSO deals.
Net income for the third quarter was $12.5 million (10 cents per share) on revenue of $117.3 million. While that was above the guided range of $6 million to $8 million, it was well off year-ago net income of $59 million, which included proceeds of $78.4 million related to TiVo’s settlement with Verizon Communications.
TAKEAWAY
An RDK strategy could help TiVo port its user interface and apps to boxes and gateways that adhere to the platform, which in turn could better position it to win new business with MSOs.
