TiVo believes its $18.5 million play for MobiTV's assets will help the company fill some critical gaps in its video tech portfolio as it seeks to expand its pay-TV universe while small and midsized operators look to stay in the game with upgraded IP- and app-based platforms.
Last week, TiVo came away as the top bidder for MobiTV's assets, including MobiTV's intellectual property and patent portfolio. TiVo also gained MobiTV's "going concern" pay-TV business that supplies white-label apps for a wide range of streaming platforms and additional infrastructure and transport rights to dozens of operators. That agreement is expected to close in the coming weeks – the court still must approve TiVo's bid and asset purchase agreement, and TiVo, at last check, is obligated to close the agreement no later than 4 p.m. EST on June 1, 2021.
Importantly, TiVo's capture of MobiTV's assets enters the picture as Xperi, which merged with TiVo in June 2020, explores the idea of separating out its intellectual property business and its product business – effectively executing the play TiVo had in mind prior to striking the merger deal.
If all goes well, that Xperi separation could happen by mid-2022. With TiVo and Xperi fully combined, the company believes it now has the scale necessary to break out those two pieces into standalone companies. And Xperi believes MobiTV can play a significant role in building out and expanding the product side of those two businesses.
"It was clear for us to be successful on a standalone basis, we needed to find growth in our largest market [for the products side of the business], which is pay-TV," Geir Skaaden, executive vice president and chief products and services officer at Xperi, explained. "This activity around MobiTV was really driven by the product side."
Demand for a fuller, managed offering for service providers
And TiVo is hopeful that MobiTV will fill some gaps in TiVo's portfolio and enable the company to offer a fuller suite of technologies and services that can help service providers make a transition to IP- and app-based pay-TV services. TiVo already has secured several IPTV-related wins with an array of technology partners, but believes the addition of MobiTV will bring a more well-rounded ecosystem in-house for operators intent on upgrading to a new platform derived from the cloud or from an on-premises solution.
"We looked at different scenarios on how we would do that within our product line," Skaaden explained. "As we engaged with existing customers and potential new customers, it was very clear that as you went beyond our existing IPTV wins, which are quite substantial, there was clearly a demand for a more full-featured, managed service offering."
Once the MobiTV agreement closes, Skaaden said TiVo's first priority is to maintain the existing service and avoid disruptions going forward. Although T-Mobile opted to shut down TVision, an in-house pay-TV streaming service that relied on MobiTV, more than 100 members of the National Cable Television Cooperative (NCTC) have launched or had plans to launch new IP-based pay-TV services with MobiTV. One such MobiTV partner, Cable One, is reportedly pleased with the outcome of the auction.
"Our intent is to build upon the service as it is, and not change it in any major way," Skaaden said
Going forward, also expect TiVo to continue supporting MobiTV;s approach of building pay-TV apps for retail streaming devices as well as for streaming devices, such as those powered by the Android TV Operating Tier, that can be managed and distributed by the operators themselves.
"We still believe that if you have your own device, that becomes a hub in someone's living room, that is probably the stickiest version of having the relationship with the end user," Skaaden said. "But clearly, Android, iOS, Roku, smart TVs – these are all very interesting platforms for operators, but also for direct-to-consumer and other use cases as well. I think those capabilities are highly strategic as we think about where we go in the future."
The deal for MobiTV's assets has not yet closed, so TiVo is not yet revealing much about any potential changes it might make to any of the legacy MobiTV service agreements. In a letter sent to members prior to the auction, NCTC suggested that operators might need to consider paying a higher monthly fee to keep MobiTV viable.
"I think we've had very productive conversations with the [NCTC] membership. We know the customers well. A lot of these key customers have been customers of TiVo for a long time and continue to be customers from their legacy QAM offering," Skaaden said. "I think this is something we'll handle in due course in this process, but I'm very confident that we'll find a way to get a win-win platform that everyone can get behind."
Meanwhile, expect MobiTV rivals to stay aggressive as TiVo prepares to absorb MobiTV's assets.
Minerva Networks, for example, is promoting a program focused on quickly converting customers from MobiTV to its own, competitive "YourTV Now" platform. Minerva's "Live in Six" campaign guarantees that it can have new customers up and running within six weeks, or it will waive the set-up fees. Minerva is limiting that conversion campaign to the first ten qualified customers.
- TiVo wins MobiTV auction with bid of $18.5M
- MobiTV's sale plan gets some static on eve of auction
- NCTC pitches plan to keep MobiTV alive
- TiVo, Xperi tout scale benefits of proposed all-stock combo
— Jeff Baumgartner, Senior Editor, Light Reading