TiVo Touts Cable Progress

Announces Cox Communications Trial, Posts Narrowed Q4 Loss

By Glen Dickson -- Broadcasting & Cable, 3/5/2008 10:02:00 PM

Digital-video-recorder supplier TiVo was accentuating the positive late Wednesday during its fourth-quarter earnings call, although the Alviso, Calif.-based company still posted a net loss of $6.4 million, or 6 cents per share, for the quarter ending Jan. 31.

That was smaller than a $19.5 million loss for the same period a year ago, however, and beat analysts’ estimates of 11 cents per share.

TiVo’s loss for fiscal-year 2008 also narrowed compared with FY 2007, to $31.5 million from $47.8 million. The company recorded service and technology revenues of $230.9 million versus $217.3 million for the same period last year and hardware revenues of $41.8 million compared with $41.6 million for last year.

Moreover, CEO Tom Rogers said, TiVo, which has some 3.95 million subscribers, is finally making progress in shifting its DVR business from a hardware-driven retail model to selling set-top software to multichannel operators.

Rogers announced that cable operator Cox Communications began a technical trial in its New England market and said Comcast’s commercial deployment of TiVo software in New England, which costs consumers $2.95 for a software upgrade, is going well, although he didn’t provide details.

“Our mass-distribution strategy is making significant strides,” he added.

While TiVo has cut back on its marketing spending and dramatically reduced hardware subsidies for its stand-alone boxes, Rogers said its TiVo retail product still has legs for two major reasons: One, it provides a DVR solution for analog subscribers; and two, the broadband connection on late-model TiVo boxes provides an alternative delivery path that could prove valuable to content creators in the future.

He noted that TiVo broadband-enabled boxes currently have access to 20,000 titles from Amazon.com and content from more than 40 TiVoCast content partners

“Looking ahead, we believe the feature set of delivering digital content directly to the TV is becoming rich and deep,” Rogers said.

TiVo announced that OmniCom Media Group became the sixth large advertising concern to subscribe to its Stop||Watch ratings service, which is also used by networks CBS and NBC.

And Rogers continued to be bullish about the prospects of collecting a large financial reward from satellite operator Dish Network (formerly known as EchoStar Communications), which in January lost an appeal of a federal-court verdict that found that it infringed on TiVo’s intellectual property.

In particular, Rogers was dismissive of Dish’s suggestion that it developed a “workaround” for its DVR service that doesn’t infringe on TiVo’s patent.

“We remain very, very skeptical of any workaround EchoStar has put forward,” he added. “Their claims through the course of litigation have been shown to be totally incorrect, and we feel that this claim will be seen to be totally incorrect, as well.”

TiVo shares were up $0.32, or almost 4%, to $8.46 each in after-hours trading.