TiVo and Time Warner Cable have endured a rocky, litigious history, but smoother roads may lie ahead for the DVR pioneer.
Comcast’s proposed $45.2 billion deal for Time Warner Cable could open new doors for TiVo and give its retail efforts a boost in several new major markets, including New York and Los Angeles, according to TiVo president and CEO Tom Rogers.
Although TiVo doesn’t have a direct distribution deal with Comcast, it has worked out an integration deal that allows TiVo’s retail boxes to access the MSO’s massive video-on-demand library in select markets. After pausing those rollout plans last year, TiVo said it and Comcast have since resumed that work, expecting to complete VOD integrations in all Comcast markets by June 30.
Comcast markets now in line to add additional support for TiVo boxes purchases at retail, including its new “Roamio” line, include Chicago, Atlanta and Houston.
If Comcast’s pursuit of TWC is successful, the merger could provide “further opportunity” for TiVo if Comcast were to expand its VOD connection to TiVo in TWC markets, Rogers said.
TiVo has had a difficult time cracking into TWC, and the two sides have spent more time fighting than hammering out deals. Last June, TiVo put its pending litigation with TWC to bed as part of a broader settlement with Cisco Systems and Google’s Motorola Mobility unit.
While TiVo pushes ahead with Comcast, its relationship with Charter Communications appears to be stuck in neutral. Rogers said TiVo’s discussions with Charter are ongoing, but he acknowledged that TiVo’s role with Charter remains limited as the MSO focuses on the development of a homespun, cloud-based interface that will be offered on existing set-tops and new, IP-capable devices.
But he said TiVo’s $135 million acquisition of search and recommendations firm Digitalsmiths gives TiVo an opportunity to play an important role with operators that don’t use TiVo’s UI. With Digitalsmiths’ customers factored in, TiVo now works with 18 of the top 25 operators.
“We’ve got more to talk about with everybody and we’re in business now with most [major MSOs],” Rogers said.
And on a wider range of boxes. Last week, Vyve, a tier-2 operator founded by former Bresnan Communications executives, said it would be the first operator to offer a TiVo-based interface running on low-cost HD-Digital Transport Adapters (DTAs) made by Evolution Broadband. Vyve will use the simple one-way, digital-to-analog channel zappers to power its all-digital migration, with initial rollouts slated for April.
Rogers said TiVo’s strategy to support lower-end DTA devices helps to form a “building-block component” for its budding cloud DVR platform, which is being tested by multiple operators, including U.K.- based partner Virgin Media.
FINANCIAL SNAPSHOT
TiVo ended the fourth quarter with 4.2 million total subscribers, up 34% from the year-ago quarter. That total included 966,000 TiVo-owned subs and 3.2 million coming by way of TiVo’s MSO partners.
The DVR pioneer grossed 49,000 TiVo-owned subs and netted 6,000 TiVo-owned customers in the period. TiVo said the 41% year-on-year boost in TiVo-owned gross additions represented its lowest churn in almost eight years and led to positive net TiVo-owned sub additions in the fourth quarter for the first time in six years.
Those additions helped TiVo to pocket a profit of $710,000, or 1 cent per share, versus a net loss of $15.8 million, or 13 cents per share, a year earlier. Revenues rose to $106.3 million from $88.9 million in the year-ago quarter.
Looking ahead, the company said it expects to pull in a first-quarter profit of $5 million to $8 million on service and technology revenues of $85 million to $87 million.
TAKEAWAY
A Comcast-Time Warner Cable deal could boost DVR pioneer TiVo’s retail prospects in TWC markets.
