TiVo Scores Cable, Retail Gains
Like Old Man River, TiVo just keeps rolling along.
Racking up yet another strong set of subscriber gains, TiVo Inc. (Nasdaq: TIVO) added customers on both the cable and retail ends of its business in its fiscal first quarter ending April 30. As a result, the DVR pioneer closed out the period with nearly 5.8 million overall subscribers, up more than 1.2 million, or 27%, from a year ago.
As usual, TiVo made steady gains on the cable front as its MSO distribution partners contributed 255,000 more subscribers in the quarter. While this total represented a marked decline from the record 341,000 cable subscribers that TiVo added a year earlier, it still reflected steady growth on both sides of the Atlantic as US, Canadian and European operators all brought in more customers.
On the company's earnings call with analysts late Tuesday, TiVo President and CEO Tom Rogers boasted that TiVo has now added 1.2 million MSO customers over the past 12 months, boosting its total cable count to 4.8 million. He also noted that North American cable operators accounted for nearly half of the customer growth in the first quarter, the highest percentage yet, as such new MSO partners as Cogeco Communications (Toronto: CCA) rolled out TiVo in new areas like Quebec in Canada. Previously, TiVo has relied mainly on rollouts by such large European MSOs as Virgin Media Inc. (Nasdaq: VMED) in the UK and ONO in Spain.
Perhaps more impressively, TiVo enjoyed its best first quarter on the retail side in eight years, netting 39,000 subscribers. The gain, up 22% from an increase of 32,000 retail subscribers a year earlier, came as the company continued to make strides with its growing lineup of Roamio and TiVo Mini set-top boxes. As a result, TiVo ended the period with 944,000 retail subscribers, down slightly from 957,000 a year ago, as it nearly offset customer losses in several previous quarters.
Thanks largely to these continuing subscriber gains, TiVo reported a profit of $7.9 million in the first quarter on $114.7 million in revenues, up 7% from $107.1 million a year earlier and higher than Wall Street's consensus forecast. As usual, the company's technology unit was the biggest contributor, accounting for $52.6 million in revenues, up from $50.1 million the year before.
Seeking to extend its influence further throughout the world, TiVo announced that it is buying Cubiware, a Polish maker of middleware and software for pay-TV operators, for an undisclosed sum. Cubiware works with about 40 pay-TV operators with 12 million subscribers spread across 25 countries in Europe, Asia, Latin America and the Middle East, including Columbus Communications Inc. and Cablemás in Latin America. (See TiVo Buys Cubiware.)
In related news this week, Cox Communications Inc. confirmed multiple press reports that it will soon start offering video-on-demand services on some TiVo retail set-tops over IP connections. The plans, which have been in the works for five years, call for Cox to deliver its on-demand services to TiVo customers who also subscribe to Cox's digital cable and broadband services. The rollout is slated to begin in Orange County, Calif., in early July and then expand to other Cox markets.
— Alan Breznick, Cable/Video Practice Leader, Light Reading