TiVo implemented a “five pillars” growth plan while continuing to “make progress” on its previously announced strategic review process, according to Raghu Rau, the company’s interim CEO and president.
“We continue to remain focused on driving growth and improving our two businesses,” products and intellectual property (IP) licensing, he said Feb. 26 on an earnings call for the company’s fourth quarter (ended Dec. 31).
The new five pillars “growth with profitability transformation strategy” was already announced internally at the company and “embraced by employees, as we look to transform our business,” he noted.
Discussing each component of the new strategy publicly for the first time, he told analysts: “First, we will launch the most advanced new content discovery solution for the Internet age.” That product will combine TiVo’s expertise in pay-TV and over-the-top (OTT) “to build a unique, integrated entertainment discovery platform for the streaming era,” he explained, adding: “This product will be designed to allow customers to build their own entertainment or streaming content bundle, and truly personalize their experience.”
The main capabilities of that new solution will include the ability for customers to “transition to Internet or streamed video delivery, powering natural language voice interactions, enabling personalized content discovery, monetizing audiences through sponsored promotions and delivering media engagement data to enable targeted advertising solutions,” he said, adding: “Central to the experience are streaming channels that bring made for digital content, movies and a variety of Internet video streams together in a single location. It will be easy to access across content platforms and content discovery will be seamless, offering an entertainment experience that is highly personalized for viewers.
“It also provides viewers the ability to access ad-supported free programming, a-la-carte purchases and subscription collections of their favorite internet-based content. Our customers will also have access to categories like news, sports and entertainment, as well as Internet favorites from well-known content aggregators. This experience will allow both our service provider customers and our retail customers access to all this content directly from TiVo Experience 4.”
The second component of TiVo’s new five pillars strategy is a plan to monetize its “footprint through a focus on promotion and advertising,” he said, explaining: “We view monetizing our discovery footprint via transactional revenue as a great opportunity for us. We can do this using anonymized data to power personalized experiences through Sponsored Discovery, content merchandising, UX display promotions, DVR playback advertising, promotion windows and targeted monetization opportunities around pure-play IP content on our forthcoming guide for the streaming era.”
Third, TiVo plans to invest in Internet-delivered TV and the Android platform, he said, noting: “We believe the cost associated with deploying QAM-based TV services have hindered deployment of next-generation services.” Therefore, it’s launching an IPTV solution on Android devices to take advantage of the TiVo Experience 4 IPTV solution to address that “growing ecosystem,” he pointed out. That will “significantly lower our customers’ deployment costs and should, as a result, accelerate our growth,” he said.
Fourth, TiVo intends to grow its consumer business and footprint, he said. “As a company with a subscription model now developing a transactional model, a direct-to-consumer footprint becomes even more valuable,” he told analysts, adding: “As such, we are looking to leverage our focus on IPTV and the Android platform to grow our consumer footprint. On that front, we intend to give consumers a low-cost entry point to a world of rich content discovery across all their video entertainment sources, and expand our transactional monetization opportunity.”
Fifth and last, TiVo plans to continue building on the “strong foundation” of its IP licensing business, he went on to say. The company, after all, has a strong catalog of “foundational IP across the TV and video domain,” and is “investing to grow and expand our portfolio and licensing business in new markets, both geographic and technology related,” he said, adding an additional “growth opportunity for TiVo, beyond traditional video providers, is the expanding interest in TV and video provided by mobile, OTT and social app providers.”
Noting again that TiVo exceeded its cost-reductions goal in 2018, he said the company will “continue to focus on additional cost efficiencies” and plans to update its “progress on that front on future earnings calls.”
In TiVo’s product business, it now has 55 customers signed up to deploy TiVo User Experience 4 and 50 customers started deploying the guide for it, he also said on the call. TiVo will also have “two major IPTV solution deployments” in the first half of 2019, he said.
The company announced in its prior quarter the deployment of its personalized advertising product, Sponsored Discovery, and launched the first advertiser campaign in Q4 with an unspecified major broadcaster for the promotion of its fall TV show launches, he said, adding: “We were very successful and, for viewers that saw the ad, it led to a 142 percent increase in tune-in rate to the new show.”
In voice-enabled discovery, TiVo’s natural language understanding entertainment discovery solutions continued to enjoy strong “traction,” he said, noting TiVo’s unique voice users grew 54% from 2.4 million at the end of Q3 to 3.7 million unique users at the end of Q4. Quarterly queries also increased 93%, from 123 million queries in Q3 to 238 million queries in Q4, he said.
TiVo also continued to make progress in innovations, he said, pointing out it had 193 patents granted in 2018, a company record.
TiVo, meanwhile, was “still in ongoing discussions with parties interested in each” of its two main businesses, he said, conceding again that the process was “taking longer than we hoped due to the unique nature” of its product and IP licensing businesses. But TiVo has “proactively begun working internally on preparing for the possible separation of the businesses to help address some of those complexities and to potentially facilitate strategic transactions,” he said.
The company disclosed a year ago that it was exploring a “broad range of strategic alternatives” that could include going private, acquisitions, or even a merger.