TiVo is making progress on the strategic objectives it recently laid out that are designed to “improve execution, drive growth in key market areas” and expand its capabilities in content discovery, according to Enrique Rodriguez, company CEO and president.
The company “completed a solid” first quarter (ended March 31) Q1 and is “well-positioned to deliver long-term growth,” he said May 10 on an earnings call, noting TiVo has a “valuable suite of technology and intellectual property” (IP) that are “key to succeeding in this evolving landscape.”
TiVo is especially well-positioned with its cloud-based, “device-agnostic solution that allows viewers to seamlessly navigate between traditional and streaming media on any device, whenever they want,” he said, adding its technologies and IP, “combined with a renewed focus on execution, provides us the opportunity to expand our presence into new and existing global markets, while improving the performance of each of our businesses.”
In TiVo’s prior earnings call, Rodriguez’s first as CEO and president, he told analysts that the company would continue to focus on growth areas of its business that take advantage of increased video content consumption and over-the-top (OTT) platform opportunities as it explored a “broad range of strategic alternatives” that could include going private, acquisitions, or even a merger.
Providing an update on the CE manufacturers market May 10, he noted IP licensing is the company’s “major focus in this area” and, during Q1, TiVo renewed deals with two customers: Vizio and Argos.
In the pay TV service provider category, meanwhile, Mediacom Communications recently renewed its product and IP licensing deal with TiVo, he said.
He also provided an update on TiVo Experience 4, which was released in Q4 to the retail market and becomes broadly available for multiple system operator (MSO) customers during the current quarter. TiVo Experience 4, which integrates the company’s OTT and linear TV solutions, is still “resonating positively” with customers, he said.
The cloud-based solution combined the technologies of TiVo and Rovi, and includes voice control with a natural language understanding engine, advanced search and recommendation, including predictive analytics. RCN recently became the latest company to deploy the TiVo Experience 4 for its customers and represents TiVo’s first deployment of an IPTV solution on the Android TV platform, Rodriguez said.
TiVo is also “seeing increased success with our best-in-class voice solutions for natural language understanding of entertainment search queries,” he told analysts, adding unique voice users grew 21% from Q4. In Q1, TiVo had 1.1 million unique users, up from 922,000 in Q4, while queries grew 62%, going from 47.1 million in Q4 to 76.3 million in Q1, he said.
The company also “made significant progress” with content and new media companies, a category that includes creators and owners of video content for OTT distribution, search, social networking and online retail, he said. During Q1, TiVo added Starz Entertainment as a licensee for TiVo’s patent portfolios, while Scripps Networks became the second customer using TiVo’s Targeted Audience Delivery service, he noted.
TiVo also expects to launch a new advertising product next quarter “combining our technology platform and household reach,” he pointed out, adding the company will “provide sponsored in-guide recommendation results for relevant programming with a mid-tier MSO located across multiple large” designated market areas (DMAs) “on their set-top-boxes, mobile and desktop platforms.”
Sponsored Discovery is a new advertising product deployed within TiVo’s Personalized Content Discovery product suite, enabling entertainment marketers to promote their shows and films to a targeted audience via a recommendations carousel, he explained.
TiVo is also making some progress in international markets, which he called another “key growth opportunity” for the company. The company recently added new service provider licensees in the Asia-Pacific region and Europe, he told analysts, telling them the agreements were “stand-alone IP deals demonstrating the value of our IP internationally.”
In Asia-Pacific, TiVo added Telstra as a licensee in Australia and renewed an IP license deal with Alticast in South Korea. In Europe, TiVo added the number two service provider in a major European country as a customer under a six-year license arrangement – a deal that was “on top of renewing eight service providers in Europe last year,” he said.
TiVo’s management team also “continues to focus TiVo on driving profitable growth by accelerating execution and optimizing our cost structure,” he went on to say. On that front, the company completed its transition to be out of the MSO hardware business, he said, adding TiVo saw the last MSO hardware revenue as it completed fulfillment of orders made last year.
In addition, TiVo “signed on a major device manufacturer as our direct-to-consumer box partner,” he said, without identifying the company. “This partner will take over retail sales outside of TiVo.com, namely through Amazon and Best Buy, he said, adding: “Once we complete this transition, we still will have direct consumer hardware sales through TiVo.com which we will be fulfilling through this box manufacturer.”
In what will be a “transformational” year for TiVo, the company has “a lot of hard, and very rewarding, work to do and we are focused on meeting our commitments and driving our teams to move quickly and efficiently,” he said. Concluding his comments to analysts, he said: It’s “a time of tremendous change in how consumers discover and consume entertainment, and this represents a great opportunity for TiVo. We have an excellent foundation to take advantage of this opportunity and I look forward to sharing our progress with you on upcoming calls.”
Despite the progress made by TiVo in Q1, revenue slipped 7.7% from a year ago to $189.8 million. However, it said “core” revenue – sales minus legacy TiVo Solutions IP licenses, hardware and other products – grew 5.9% to $174.8 million. Its loss, meanwhile, narrowed to $17.7 million (15 cents a share) from $34.7 million (29 cents a share).