It’s still early days for new TiVo opportunities including Internet Protocol TV (IPTV) solutions, but the company is making major strides on them, according to CEO and president Thomas Carson.
“We’ve made a significant amount of progress with several of our product growth initiatives,” he said Nov. 2 on an earnings call for the company’s third quarter (ended Sept. 30). “While not yet visible, we expect these efforts to start showing results next year and beyond,” he told analysts.
With IPTV, “there is a significant opportunity to accelerate upgrades from current customers and to meaningfully grow our footprint,” he said. TiVo’s IPTV product “will enable pay-TV operators to deliver a great user experience with multi-screen” and over-the-top (OTT) functionality, but with “much lower operational and deployment costs,” he told analysts, adding the company expects its IPTV offering to become available in the first half of 2018.
TiVo expects IPTV upgrades to classic guides and international expansion will become “important drivers” of TiVo’s platform solutions business, he said.
Another new growth area that the company is upbeat about is data and advertising, he said, calling data “an important enabler for TiVo to bring many new capabilities,” including advanced advertising and media personalization.
TiVo processes TV viewership data for more than 25 million U.S. households now, he noted. The company obtained rights to “millions of TV households for anonymous, de-identified third-party use and we’re seeing strong demand for our TV data platform offering,” he said, adding: “We expect this offering to continue to grow as we onboard more households.”
The company will also start “rolling out an innovative” new interactive advertising service to be available to customers using the TiVo user experience or its search and recommendation product to “allow more targeted and personalized promotions,” he said. TiVo’s “continued advancements in data, advertising and search and recommendations are key areas of innovation, which we believe will drive future growth for our software and services business,” he told analysts.
TiVo’s IP business had a strong third quarter as the company signed a three-year deal with AT&T that extended licensing rights through 2025, he said. Combined with previously-announced, long-term deals with other leading U.S. pay-TV operators, the AT&T pact “provides a strong foundation and corresponding annuity-like revenue stream well into the middle of the next decade,” he said.
TiVo, meanwhile, recently renewed and expanded its IP licensing relationship with Liberty Global, the largest pay-TV operator outside the U.S., “bringing their entire footprint under license,” he said. The company also recently announced Sony renewed its multi-year IP license to TiVo’s patent portfolios covering all of Sony’s global products and services, including OTT and virtual pay-TV, he noted, adding: “Bringing Comcast under license remains one of our top priorities.” Comcast and TiVo are in the middle of a patent dispute.
Beyond the “upside from a potential” licensing deal with Comcast, “there are multiple significant opportunities for our IP licensing business, where we can grow recurring revenue,” he went on to say. Those include making additional progress with international pay-TV operators, especially in Canada, signing additional deals in the mobile and OTT spaces, and “opening some new adjacent verticals,” he said, adding TiVo “will discuss these opportunities in more detail in future quarters, as we continue to make progress in signing new licensees.”
TiVo also continued to make progress on its search for a new CEO and expects to “have the process wrapped up shortly,” he said. Carson plans to retire.
The company reported Q3 revenue jumped 29% from a year ago, to $197.9 million, driven in part by the successful integration of TiVo’s products and brand into the company that once was Rovi. But the company swung to a $17 million loss from a $49.9 million profit a year ago.
TiVo recently launched voice search across live TV, DVR, video on demand and online streaming services as part of its latest U.S. retail consumer offering. Those products also now include the New TiVo Experience, the latest version of its on-screen user experience.
On the same day as the results call, TiVo announced that Millicom, a provider of cable and mobile services for more than 57 million customers in Latin America and Africa, selected TiVo’s next-generation user experience platform to bring advanced entertainment experiences to customers in Latin America. The Tigo ONE TV service was made available to Millicom subscribers in Colombia, and there are plans to deploy in certain other markets where it operates, TiVo said.