FBR Ups TiVo Subs Estimate

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DVR software supplier NDS said Tuesday it did not begin deploying its technology to DirecTV until deep into the last quarter (ended Dec. 31), later than some analysts had projected.

DirecTV, which had been pushing TiVo's DVR's to its customers, is instead encorporating the NDS DVR capabilities into its digital set-top boxes (DirecTV parent News Corp. also owns a majority stake in NDS).

The late start for the DirecTV rollout led Wall Street analyst Freidman Billings Ramsey to dramatically up its estimates of TiVo subscriber additions in its fourth quarter (ended January) to 223,000 from 40,000 but did not change its "underperform" rating on the stock.

"This does not change the fact that [direcTV] will no longer promote TiVo," said FBR analyst Brian Coyne. "It just delays the impact."

Despite a DVR deal with Comcast, Coyne does not see much growth potential for TiVo, with many cable operators eschewing the box for unbranded DRV technologies and DirecTV, its main sub driver, no longer promoting the boxes.

The stock could get some bump if TiVo wins an upcoming patent-infringement suit against EchoStar's digital boxes with DVR functions.

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