- Share this article on Facebook
- Share this article on Twitter
- Share this article on Email
- Show additional share options
- Share this article on Print
- Share this article on Comment
- Share this article on Whatsapp
- Share this article on Linkedin
- Share this article on Reddit
- Share this article on Pinit
- Share this article on Tumblr
It’s been nearly 20 years since TiVo launched with promises to change the way television is viewed. It mostly was right: More than half of U.S. households now use a DVR, but TiVo was a victim of its own success as cable providers quickly mimicked the product. Some analysts predicted extinction, but the $1.1 billion acquisition of TiVo by Rovi, known for its onscreen TV guides, ensures the brand will live another day. The combined company, run by Rovi CEO Tom Carson, even will adopt TiVo as its corporate name.
The deal “will create the market’s largest entertainment software provider with hundreds of operator, consumer electronic and content owner relationships,” said TiVo interim CEO Naveen Chopra during an April 29 call discussing the pact.
The TV technology companies acknowledged layoffs among Rovi’s roughly 1,700 and TiVo’s 600 employees will occur because of “overlap” in areas like media analytics. “TiVo’s measurement product is based on TiVo users, a tiny portion of the population,” says Leichtman Research Group president Bruce Leichtman. “With Rovi, there’s potential to make their measurement more reflective of the population of time-shifters.”
Another effect of a TiVo-Rovi marriage is that lawsuits will continue. TiVo has made $1 billion by suing Dish Network, Samsung and other infringers of its 1,000 DVR patents, and Rovi, which has 5,000 patents, is suing former customer Comcast. “Rovi was more aggressive in renewing its patents, and we expect a similar approach with TiVo’s,” says Macquarie Capital analyst Andrew DeGasperi.
About 10 million households use a TiVo, mostly through cable companies that pay TiVo about $1 a month — though 1 million users pay about $8 a month directly to TiVo for one of its souped-up DVRs that still are considered the gold standard. As for Rovi, its interactive TV guides are in about 18 million homes and have generated nearly $2 billion in revenue since 2008. The company, via its 2008 acquisition of Gemstar, is credited with inventing the interactive program guide, just as TiVo gets credit for inventing the DVR.
Leichtman sees potential for Rovi to leverage TiVo’s name further — to a point: “Rovi is buying a brand more than a product. But like Kleenex, is the name so ubiquitous that you can no longer derive value from it?”
This story first appeared in the May 13 issue of The Hollywood Reporter magazine. To receive the magazine, click here to subscribe.
Sign up for THR news straight to your inbox every day