|TiVo Sees Surge In Subscriptions Thanks To Cable Deals; Reports Service Revenues Of $61M, Net Income Of $59M In Q3 |
November 28, 2012
TiVo announced reported solid third-quarter financials, thanks to subscription growth from pay TV partners and the first payments in litigation it settled with Verizon earlier this year. It reported service and technology revenues of $61 million, which was up 18 percent from a year ago. It also reported net income of $59 million, which was bolstered by $78.4 million from litigation proceeds due to the Verizon settlement.
A few years ago, TiVo looked like it was on the brink of dying. As pay TV operators began offering their own leased DVR offerings, consumer interest in the company’s DVR hardware waned. With the DVR becoming a commodity, TiVo was losing hundreds of thousands of subscribers a quarter, as old users left and the company failed to attract new subscribers to replace them.
Things are looking up over recent quarters, though, as TiVo has struck deals with pay TV operators — the same group that almost rendered its hardware irrelevant — to license its hardware and software available to their subscribers. The result has been a massive turnaround in subscribers and revenue its generating. MSO-related revenues, for instance, are up 84 percent year-over-year thanks to those deals.
The company has also succeeded in patent litigation, most recently against Verizon, which agreed to pay TiVo more than $250 million to settle a long-running lawsuit against it. That brings total winnings from patent litigation to more than $1 billion over recent years.
The combination of those two factors — cable deals and patent wins — has breathed new life into the DVR tech innovator. TiVo is no longer on a slow and steady race to zero, but actually growing subscribers at a faster and faster clip as time goes on. In the third quarter, its subscriber additions grew 44 percent year-over-year, compared to 41 percent in the second quarter and 27 percent in the first quarter.
TiVo hit its lowest point on the subscriber mark about five or six quarters ago, as its user base declined to 1.9 million. Now, it’s got nearly 3 million subscribers at the end of the third quarter, thanks to huge growth in its pay TV business. It’s now adding upwards of 250,000 subscribers a quarter thanks to its MSO deals, and that number could increase even further as it brings more on board. In the quarter it brought on new U.S. partners Mediacom, Midcontinent, and Cable ONE to expand its partner footprint. That comes on top of Virgin Media in the U.K., ONO in Spain, and Com Hem in Scandinavia.