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TiVo Makes More Cable Gains

Alan Breznick
11/27/2014

Racking up another strong quarter, TiVo surpassed 5 million subscribers for the first time and generated record revenues in its latest reporting period.

TiVo Inc. (Nasdaq: TIVO) reported late Tuesday that it netted 328,000 subcribers in the three-month period that ended October 31, boosting its total subscriber count over the 5.1 million mark. Thanks to this gain, the DVR pioneer generated revenues of $118.4 million (its highest quarterly total), up from $117.3 million a year earlier. However, its net income fell to $6.3 million, down from $12.4 million in the year-ago period and slightly below the Wall Street consensus forecast, due largely to lower tax breaks.

As usual, TiVo's growing portfolio of MSO partnerships made the difference in the fiscal third quarter, as the company continues to pile up cable customers while struggling to maintain its retail base. TiVo added 337,000 cable subscribers in the quarter, lifting its MSO subs count over the 4 million mark for the first time to slightly more than 4.2 million. The company has now added more than 960,000 cable customers during the first nine months of the fiscal year. (See TiVo Continues Cable Run.)

Continuing a long-term trend, TiVo lost another 9,000 "TiVo-owned," or retail, subscribers in the third quarter, knocking its total down to about 930,000. But the company noted that it pared its subs losses from 21,000 in the year-ago period.

On his earnings call with analysts, TiVo CEO Tom Rogers said the company is making progress on the retail front, thanks largely to the popularity of its year-old Roamio line of DVR set-top boxes. Rogers said the advanced digital set-tops, which also enable Internet video streaming, helped drive higher gross additions of retail subscribers in the quarter and netted TiVo more subs than it churned in October for the first time in seven years.


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Rogers said TiVo is also "seeing positive initial interest for the TiVo OTA offering," its latest Roamio model that offers over-the-air broadcast channels and is designed for pay-TV cord-cutters. He said company executives are "hopeful" that the Roamio OTA "will meaningfully contribute tour fourth-quarter gross subscription acquisitions."

Looking forward, TiVo said it expects its service and technology units, its two biggest, to produce joint revenues of $87 million to $90 million in its fiscal fourth quarter, about the same as the $88.1 million they produced in the third quarter. The company expects to reap net income of $2 million to $5 million in the final quarter of the year.

— Alan Breznick, Cable/Video Practice Leader, Light Reading

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Mitch Wagner
Mitch Wagner
12/3/2014 | 8:24:04 PM
CableCARD
I wonder whether the recent decision that cable companies are no longer required to provide CableCARD will prove fatal for TiVo's retail business?
kq4ym
kq4ym
11/28/2014 | 5:01:35 PM
Re: TIVO
Tivo on one hand seems to be doing well but "its net income fell to $6.3 million, down from $12.4 million" is presumably for many not a happy thing. Getting out the new product line will probably help, but it's still going to be a long haul I would guess to keep those profits high and reasonable in the current climate.
thebulk
thebulk
11/28/2014 | 9:49:00 AM
Re: TIVO
@Michael, 

Most providers now offer a multi-room DVR setup which I think is a much nicer setup. Once features that I know TiVo offers thought which I like and to my knowledge I do not know if any carrier offers this but its streaming from the DVR to a mobile device. I have not used that feature, but I think it would be useful if it works well. 
Michael Shire
Michael Shire
11/28/2014 | 9:29:05 AM
Re: TIVO
"there are better platforms that are more innovating and have a much more robust feather set"

Could you name some?  This is not to challenge your position, I'd just like to do a little research into them.  Thanks!
thebulk
thebulk
11/27/2014 | 2:21:09 PM
Re: TIVO
I also find myself scratching my head and wondering where this growth is really coming from? there are better platforms that are more innovating and have a much more robust feather set, yet TiVo pushes on. 
MikeP688
MikeP688
11/27/2014 | 11:43:59 AM
Re: TIVO
I second that--the trailblazer that TiVO was is ever so evident today for all the end users.  It is ever so amazing to see that TiVO has been able to reinvent itself as it has. Such trailblazers are needed even more today--especially as Cable continues to suffer that has been deliberated here in the New IP by us. 
briandnewby
briandnewby
11/27/2014 | 7:33:16 AM
TIVO
Never underestimate the value of subscription fees.  It feels like TIVO devices are such yesterday's news because cable companies have whole home DVRs and, of course, fewer use cable.  To get growing in such an environment is amazing, really.
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