More subscribers no help for digital video recording pioneer
TiVo cut its losses and made small gains in its subscription base in the quarter ended Oct. 31 but failed to impress investors as its stock fell 4% in after-hours trading.
Bits of good news may have been outweighed by guidance, in which TiVo said its loss would skyrocket to between $33 million and $38 million in the current quarter due to rebates it’s offering on hardware.
Digital video recorder pioneer also announced that it has signed its first distribution deal outside the U.S., pacting with Cablevision Mexico, the largest cable operator in Mexico City, to offer its software to subscribers.
TiVo signed a similar pact with Comcast last year. Service, which would let Comcast DVR subs add TiVo software for several extra dollars per month, was supposed to launch by the end of this year but has apparently been delayed. TiVo chief exec Tom Rogers called the deal “critically important,” but of its status he would say only that it is “progressing well.”
Company added 53,000 net subscribers on its own but suffered as DirecTV continued to shift its customers to its own generic DVR service. As a result, TiVo lost 37,000 DirecTV subs in the quarter and ended up with a total net addition of just 16,000. Overall, it has added just 426,000 subs since a year ago, bringing its total to about 4.4 million.
Net revenue was up 32% at $65.7 million, while net loss narrowed by 22% to $11.1 million.
TiVo also focused in the quarter on new advertising deals, such as an agreement to start putting new ads at the end of recorded programs. It’s counting on DVR advertising services for its own subscribers, as well as for partners like DirecTV and Comcast, along with software distribution deals with cable providers, to help make up for declining interest in its hardware in the face of low-cost generic DVRs.
Before earnings were announced Wednesday, TiVo shares were flat at $6.29.