TiVo CEO: 'iPad Effect' Could Spur Cable Deals
TiVo Inc. (Nasdaq: TIVO) CEO Tom Rogers believes the “iPad effect” -- pay-TV providers looking for a better interface to deliver multiplatform programming -- bodes well for the company and its partnership push with operators. (See Verizon Goes iPad Crazy, TWC Preaches Openness With iPad Tilt , and To Xfinity... & Beyond!)
Rogers said the user interface offered by the interactive program guides that most cable operators use today is “hopelessly outdated.” Cox Communications Inc. recently agreed to support TiVo’s Premiere HD-DVR at retail and integrate the MSO's video-on-demand (VoD) service with the box's integrated broadband video capabilities. With cable operators facing stiff competition from telcos and over-the-top Web video, Rogers suggested that more deals could be on the horizon. (See Cox, TiVo Strike a DVR Deal.)
“The urgency factor... has become the front and center issue for all of thee operators, which is why what we are doing is gaining momentum,” Rogers told analysts on TiVo’s second-quarter earnings call Wednesday.
The distribution deals TiVo struck this year with Cox (retail only), and RCN Corp. and Suddenlink Communications (MSO-leased TiVo boxes) are some of the recent, major domestic cable agreements it has landed in more than a decade of trying to woo operators with its navigation software and DVRs. (See Suddenlink Boxes Up TiVo Deal and RCN to Expand TiVo 'Premiere' Rollout.)
When pressed by an analyst on TiVo's potential to strike similar Premiere box integration deals with Comcast Corp. (Nasdaq: CMCSA, CMCSK), Rogers said he wouldn’t comment on talks with specific operators. But he said other cable MSOs are talking to TiVo about deploying the device to offer subscribers content ranging from broadband video to cable VoD programming. “We do have a number of discussions going on relative to that solution,” Rogers said.
TiVo is also continuing to develop software for cable’s tru2way platform, which would allow operators to deploy TiVo’s user interface and broadband video content to set-tops already in the field from Cisco and other set-top vendors, Rogers said. (See TiVo Building tru2way Version of New Interface.)
“We did not want to wait for the relatively slow development of tru2Way into the marketplace. We have a great nearer-term solution for operators to embrace,” he said regarding the option that RCN, Cox, and Suddenlink are taking to allow subscribers to use the Premiere set-top.
RCN recently began marketing Premiere as its primary DVR to subscribers in New York and its other markets. While not disclosing the number of RCN subscribers that have taken the high-end DVR, Rogers said, “It is as good an uptake that we could expect for three months of activity on their part.” (See TiVo Blows Into Chicago and RCN to Expand TiVo 'Premiere' Rollout.)
Rogers was also bullish on the prospects for a new, but delayed TiVo-powered HD-DVR that DirecTV Group Inc. (NYSE: DTV) will begin marketing in the fourth quarter. [Ed. note: Technicolor (Euronext Paris: TCH; NYSE: TCH) is making that box.] TiVo’s subscriber base has been taking hits ever since the No. 1 satellite-TV service provider stopped deploying TiVo DVRs in 2007.
“We believe the demand is strong, particularly among existing and former TiVo subscribers,” Rogers said. “There are a good million and a half or so DirecTV subscribers who are former TiVo subscribers.”
TiVo is banking on its cable and DirecTV deals to help move the company toward growing its subscriber base, after losing customers. TiVo lost 125,000 subscribers in the second quarter. It counts 2.3 million total subscribers, compared to 3.05 million at the end of the second quarter of 2009. (See TiVo Posts Q4.)
TiVo is also relying on patent litigation with Dish Network LLC (Nasdaq: DISH), EchoStar Corp. LLC (Nasdaq: SATS), AT&T Inc. (NYSE: T), and Verizon Communications Inc. (NYSE: VZ) to boost revenue. Rogers said TiVo is “extremely confident” that it will succeed in its patent litigation with EchoStar. (See TiVo: AT&T and Verizon Won't Strike a Deal and Microsoft Takes On TiVo .)
“There will be hundreds of millions of damages ultimately awarded,” he predicted. TiVo is scheduled to file briefs in September for an en banc review of an earlier patent ruling that had favored TiVo. (See TiVo Shares Dive on Court Decision.)
— Steve Donohue, Special to Light Reading Cable