TiVo makes friends on Madison Avenue

Company inks data deal with ad giant

TiVo is continuing to reinvent itself as an ad-services provider — and for good reason.

Company on Wednesday said it would start selling its research to Madison Avenue giant Omnicom, offering the shop a raft of specific data on the commercials that auds viewed.

Omnicom also agreed to buy an undisclosed amount of advertising on TiVo’s service.

A few hours later TiVo showed why the reinvention is needed: Company revealed that its second-quarter loss had widened significantly to $6.5 million from $900,000 a year earlier.

And while the all-important service and technology revenue rose 30% to $52.9 million in the frame, that figure was smaller than some analysts had expected.

TiVo is still adding subs, though at a slower rate — net gain in the quarter was 30,000.

To compensate for the business lost to cable and satcaster competition, TiVo is gearing up to become a provider of ad data for marketers seeking to reach the slippery TV audience — an aud made slippery by TiVo itself.

TiVo became popular because of its ad-zapping power but is now trying to leverage its base into ad dollars, selling second-by-second info to advertisers and nets. Omnicom deal follows a similar one with Interpublic in the spring.

And last week TiVo pacted with a second cable operator, Cox, after a lull since signing up original partner Comcast. Cox DVR subs can now use their existing boxes to receive TiVo’s recording services, which offer some flourishes that Cox’s don’t. In return, TiVo hopes to expand its base and thus make its audience measurements more useful — and valuable.

TiVo is also adding a new layer of pricing plans in an effort to coax out more revenue. Earlier in the year it eliminated its lifetime sub plan, regarded by many as too much of a revenue quick fix.

In part because of the widening loss, stock closed down 1.8% Wednesday at $7.66.

Not all of the loss is TiVo’s fault, and indeed, some could set the table for future gains.

One of company’s key expenses in the quarter was litigation, as the firm is in a battle with EchoStar over the satcaster’s digital video recorders.

That effort has born fruit, earning TiVo $90 million in damages and an injunction preventing EchoStar from selling and supporting its DVR, though the case is under appeal.

TiVo also could be preparing to take on other cable providers and satcasters who offer DVRs.

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