TiVo has loss on lower sales
DVR maker cut back marketing while developing partnerships
By Danny King -- Video Business, 5/27/2009
MAY 27 | DIGITAL: TiVo had a fiscal first-quarter loss as revenue fell after the digital-video recorder maker cut back its marketing efforts related to selling its standalone set-top boxes while its partnerships with multichannel service operators like Comcast were in its early stages. The company, whose loss was narrower than it forecast, also said it expected a ruling on litigation with EchoStar that may bring additional revenue.
For the quarter ended April 30, TiVo had a loss of $4.13 million, or 4¢ a share, compared to net income of $3.62 million, or 4¢, a year earlier, as service and technology revenue fell 12% to $48.5 million, the company said. TiVo in March forecast a loss $6 million to $8 million on service and technology revenue of between $47 million and $49 million.
The company was expected to lose 5¢ a share on $48.6 million in sales, the average analyst estimates in a Thomson Financial survey.
TiVo-owned subscriptions fell about 6% from a year earlier to 1.64 million as the company cut marketing costs and focused on content and distribution partnerships with companies such as Comcast, Amazon.com and Blockbuster. Comcast, the largest U.S. cable company, is expanding the inclusion of TiVo DVRs for its New England customers and is about to begin a similar program in Chicago.
In the past two months, TiVo has reached agreements to make Blockbuster's digital titles playable on televisions through its DVRs while making Amazon's high-definition titles downloadable to TV sets through TiVo machines.
Additionally, the high-definition DVR TiVo is developing with U.S. satellite leader DirecTV will be available to the public early next year, according to Rogers.
"The combination of those things should be contributing to a positive rather than a declining TiVo subscription count," said TiVo Chief Executive Officer Tom Rogers on a conference call with analysts today. Rogers characterized the company's partnership with Comcast as "in a nascent stage."
The company is also awaiting a court ruling related to last year's judgment TiVo won against EchoStar from a patent-infringement lawsuit. Rogers said he expected a ruling "very soon" on whether EchoStar will be held in contempt for alleged continued patent infringement during the court injunction.
