TiVo's stock soars on consumer products deal
HOLLYWOOD — Digital video recording service TiVo has landed a deal with Sony that will put the service in millions of the latter’s consumer products. TiVo stock closed up 21.76% Thursday to $5.54 on the news.
The seven-year deal is a huge expansion of TiVo’s relationship with Sony that began in 1999 with Sony taking an unknown minority equity stake in TiVo and agreeing to manufacture set-top boxes that combined the DirecTV satellite service with TiVo.
TiVo CEO Mike Ramsay estimated the company would generate upwards of $15 million in additional revenue during the first year of the deal.
“It’s really up to Sony in terms of what kinds of products they are going to deploy in the long term,” TiVo spokeswoman Rebecca Baer said. “It could range from including the recording capability in portable devices, in DVD players or in televisions themselves. Down the road, it could move beyond video recording into audio devices.”
New agreement is non-exclusive, meaning TiVo can still license its technology to other manufacturers. Much of TiVo’s revenue has been eaten up by the expense of designing set-top boxes and bringing them to market.
Subscriptions to TiVo’s service have steadily grown over the past several quarters and now stands at more than 200,000.