TiVo chugs on, boosts subs and sales

CEO Rogers talking with MSOs Stateside, overseas

TiVo, which developed the first DVR back in 1997, is still kicking around thanks to global deals with cable operators like Virgin Media in the U.K. and Ono in Spain and ongoing patent lawsuits that bring millions of dollars in damages, as well as hefty legal bills.

TiVo shares shot higher in after-hours trading Wednesday after the Los Angeles company said total subscriptions rose by 230,000 last quarter, up 41%. Net losses widened to $27.7 million from $19.6 million but topped expectations. Revenue rose to $65 million from $61 million.

The stock has been buffeted over the past year, plunging from $12 early on to $7 this summer. It dipped 1.89% to $9.36 during regular trade Wednesday on Wall Street jitters ahead of the numbers. CEO Tom Rodgers, a former top NBC exec, said subscriber momentum comes from a range of cable operators that are picking up TiVo’s offering, leading to a 36% hike in MSO revenue. TiVo hit over 1 million subs in just over a year with Virgin. It’s growing with Ono; Sweden’s Com Hem, the largest operator in Scandinavia; and GCI, Alaska’s largest cable provider. The idea is that cable operators offer subs a TiVo set-top box instead of — or in addition to — their own, often less expensive product.

“We will continue to have a flow of operator deals through this year,” Rogers said on a conference call. “We’re in discussions with medium and small guys in the U.S. and guys of all sizes outside the U.S.”

DirecTV offers TiVo as an optional platform. It has a marketing deal with Comcast in several markets and has been working with Charter although deployment is slow, Rogers said.  

At its height in 2007, TiVo had about 4.4 million subscribers. It ended last quarter with 2.7 million. That was split into 1.1 million TiVo-owned subs (down 23,000 from the year before) and 1.6 million subs through MSO partnerships (up 253,000).

The erosion came as cablers borrowed from TiVo’s playbook and started offering their own boxes. TiVo has had to claw its way back, even with a name synonymous with digital video recording.

TiVo has rarely been in the black, although Rogers said he can now see a path towards profits — excluding legal fees.

Because TiVo’s other main front is in the courtroom, where it’s in constant battles over patents. It won a $215 million payout from AT&T this year and is heading to trial with Verizon in October. It has cases pending with Motorola, Cisco and Time Warner Cable.

TiVo is working with PayPal on a service to let viewers purchase products featured in interactive ads on the TiVo user interface.

The well-received TiVo Stream service makes content on a consumer’s TiVo available on alternative screens like tablets, smartphones and computers. It’s the first product to give cable subs the ability to simultaneously stream or download shows to multiple portable devices without interrupting television play.

TiVo recently started offering its reduced cost TiVo Premiere 4 DVR that can record up to four programs simultaneously.

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