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OTT, Other IP Licensing Gave TiVo a Q1 Revenue Boost

Strength in over-the-top (OTT) and other intellectual property (IP) licensing provided TiVo with a lift in its first quarter (ended March 31), according to company executives.

TiVo revenue increased 1% from a year ago to $159.9 million, “primarily due to IP licensing revenues, increasing by $6.5 million, or 10% year-over-year, driven by subscriber growth and new licenses executed since the year ago period,” TiVo CFO Wes Gutierrez said May 6 on an earnings call.

“We continued to add to our OTT licensing program with a new long-term IP license with another major content provider network this quarter,” David Shull, TiVo CEO and president, told analysts.

TiVo also achieved “IP licensing success internationally in Q1 by renewing multi-year agreements” with Japan mobile provider NTT Docomo and consumer electronics manufacturer Funai, he said, adding: “We are pleased with the progress of our IP licensing business as it continues to build and secure a strong and diverse base of customers.”

Meanwhile, “we find ourselves in uncharted waters as people, a company and a global community [as] everyone is having to adjust to radically different environments,” he noted. “From a strategic standpoint, while the coronavirus has been disruptive on a global scale, it has validated our belief that there is a tremendous desire for the type of unified entertainment finding and watching experience provided by TiVo,” he said.

“The overall strategic relevance of our business model has never been greater,” he told analysts, adding: “Many of TiVo’s secular trends not only remain intact, but have accelerated. We’ve continued to execute against the two key value drivers that I have highlighted in prior calls. The first is launching TiVo wholeheartedly into the streaming wars with cutting edge streaming products that uniquely solve the emerging challenges of digital entertainment. The second is instituting a strong operating focus and excellence throughout the TiVo organization, through a combination of smart investments in long-term growth, disciplined spending, cost controls and keeping these efforts aligned with a clear strategic vision.”

Regarding TiVo product business, “viewership metrics show that people are, of course, watching more content during these times,” he pointed out. As an example, starting March 23, the second week of shelter in place ordinances, TiVo saw a 58% increase in entertainment watching across the TiVo platform, he said. “Not only was there a 600 percent increase in viewing of pandemic-related titles, but we also saw significant increases in cooking titles, kids programming and news,” he told analysts.

As people spend more time at home, “making entertainment easy to find, watch and enjoy has never been more vital and essential,” he said, adding the TiVo team rose to “support this increased volume despite all of the challenges of working from home.”

Those “viewership metrics bode well for TiVo,” he told analysts, adding pay TV operator households deploying the TiVo user experience are up from the prior year in the Americas and “we continue to transition more legacy Classic Guide households to TiVo Experience 4,” he said.

TiVo is “working closely with our customers to help them adapt to the new environment as well, including developing a self-install process for our cable operators so that they no longer have to go into customers’ homes to set up an entertainment viewing platform,” he went on to say.

As a result, the company expects its Android IPTV “deployments to fuel footprint growth for 2020,” he said, adding: “We now have 11 North American operators who have entered into agreements to deploy this solution, up from nine last quarter, which includes broadband-only households.”

TiVo also continues to expand internationally. In the past 90 days, the company  “moved from the sales win stage to actual deployment” of its Android IPTV platform at three major operators: Liberty Latin America, RCN and TDS Telecom., he said.

On the new product front, the TiVo Stream 4K product that it previewed in January at the Consumer Electronics Show launched May 6 on TiVo.com, he noted. “With an introductory price of $49.99, including a free 7-day trial of Sling TV for new Sling TV customers, Stream 4K will provide a new way to integrate video streaming services like Netflix, Prime Video and Google Play with live TV streaming provided by Sling TV and our own TiVo+ content,” he said.

“During the COVID-19 pandemic, viewers are struggling to find their favorite streaming shows,” he went on to say, noting “they are overwhelmed by an overflowing sea of streaming apps.” TiVo Stream 4K “integrates all of that content with recommendation and search features to make it easier to find, watch and enjoy the best entertainment, news, and sports from today’s most popular services,” he said.

On May 5, TiVo announced a new content deal with Pluto TV that he said will add over 70 new channels to the current TiVo+ lineup of popular channels. The deal represents a “major expansion to TiVo+ as it will be able to distribute exclusive Viacom and CBS programming, movies, news, sports, Latinx and African American programming from Pluto TV’s catalog.”

The earnings call stands to be the company’s last as TiVo. The company filed definitive proxy materials with the SEC and mailed those materials to its stockholders for a special meeting to vote on its merger with Xperi. The stockholder meeting, which will be held virtually, is scheduled for May 29. The companies’ teams “have been working diligently on integration planning and we expect to complete the merger in the current quarter,” Shull said.