Tivo’s Profit Recipe: Persistence, and Plenty of Lawyers

August 28, 2013 Leave a comment

August 27, 2013, 7:30 PM

Tivo’s Profit Recipe: Persistence, and Plenty of Lawyers

By Tom Gara

082013ptechtivo_512x288

TiVo’s new Roamio, which allows you to stream TV and DVR to mobile devices

From the WSJ’s Ian Sherr:

TiVo Inc.TIVO -1.61% announced the highest net revenue and profit in the company’s history and strong subscriber growth, causing the company to predict profits ahead for the foreseeable future. The company, which has mostly posted losses since the second half of 2009, said results for its second fiscal quarter and ongoing royalty payments stemming from patent litigation eased doubts about its long-term profitability. “Everyone has been asking that question about TiVo for a decade,” said Tom Rogers, TiVo’s chief executive, in an interview. TiVo came early to the DVR business, but soon found its product being replicated in one way or another by many in the cable industry, as well as by new entrants from the Internet.One response to this was to keep on improving the product, keeping customers happy and defections to a minimum, and that seems to have worked: For the last eight consecutive quarters, TiVo has reported net subscriber growth, and revenue in the most recent quarter jumped 53% to $100 million.

And on the product front, it has kept up to date: The WSJ’s Walt Mossberg said its latest recorder, which also lets users stream video to their mobile devices, “could be considered the holy grail of set-top boxes.”

But the other response to the competition has also turned out pretty well: TiVo sued plenty of companies that it considered to be in breach of its intellectual property rights, and has reached settlements with many of them. Google and Cisco agreed to pay $490 million, while Verizon said it would pay at least $250 million. Dish Network and its former unit EchoStar agreed to a $500 million settlement in 2011.

In total, the company says it has secured about $1.6 billion in damages and consideration through its litigation. And that revenue stream is set to continue long into the future: here’s how the company estimated revenues from it settlements and licensing agreements from 2015-2024, in the results released on Tuesday:

0vnn7jK

Filed under TMT Trends

Unknown's avatarAbout bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

Leave a comment