TiVo cuts loss on revenue gains

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TiVo Inc. posted a narrower quarterly loss on higher revenue even as it did not add many subscribers during the three-month holiday period. Separately on Wednesday, the company rolled out its broadband VOD product, the result of a partnership with Amazon.

TiVo said fiscal fourth-quarter revenue rose 29% to $77.6 million as service and technology revenue, which strips out hardware sales that are largely subsidized, rose 22% to $57.4 million.

The company posted a loss of $18.7 million, better than the $21.1 million loss it reported a year ago.

TiVo-owned subscribers rose 16% year-over-year to 1.7 million as TiVo subs from the company's relationship with DirecTV Group fell to a total 2.7 million, leaving TiVo with slightly more than 4.4 million, a bit more than it had in the previous quarter.

While DirecTV supports its TiVo subs, it no longer markets TiVo, choosing instead to push DVRs from NDS Corp. which, like DirecTV, is controlled by News Corp.

Besides the roll out of Unbox, its VOD initiative with Amazon, TiVo CEO Tom Rogers told analysts during a conference call that he was bullish about the company's advertising business and the upcoming offering from Comcast Corp. and Cox Communications.

Comcast will begin offering the TiVo service in an "initial sizable market," Rogers said, "in the relatively near future," with Cox also scheduled for this year.

Asked whether Comcast might cannibalize stand-alone TiVo subs, Rogers said, "It's not an issue we can ignore." Although he added that the TiVo-Comcast product will not include all the bells and whistles of a stand-alone, broadband-connected TiVo. Unbox, for example, won't be available with Comcast-TiVo.

He said TiVo is shooting for break-even net income in fiscal 2008, which is the current year, as the company reduces its focus on hardware rebates and begins a year-round advertising campaign designed to educate consumers about the virtues of TiVo over generic DVRs.

He said that HD TV is a huge trend that TiVo hasn't been taking advantage of with its $800 DVR for recording in HD because of the prohibitive price, so TiVo is working on a lower-cost HD-DVR product.

The average price per user for stand-alone boxes increased to $8.99 per month and should still go higher because TiVo no longer offers lifetime subscriptions. That same metric is just $1.02 for DirecTV-TiVo subs.

Rogers was light on details of TiVo's ongoing legal dispute with EchoStar Communications, but did say a "briefing process" would commence April 18.

Shares of TiVo rose 3.4% on Wednesday to $6.14 and climbed a bit further in after-hours trading after the earnings update.
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