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MSO Deals Lift TiVo’s Subscriber Boat in Q1

Adds 277,000 MSO Subs; CEO Tom Rogers Says Liberty Global Getting 'Increasingly Comfortable' with TiVo's Value 5/20/2013 2:22 PM Eastern

MSO partnerships highlighted TiVo’s fiscal first quarter, as the DVR pioneer added 277,000 subscriptions through pay TV partnerships, marking its largest quarterly subscription gain in the category in more than seven years. MSO revenues, meanwhile, jumped 98% year-over-year, TiVo said.

Virgin Media represented the bulk of those subscriber gains, as the U.K.-based MSO added 172,000 in the period, extending its total to 1.5 million, or 40% of the MSO’s base.

In an interview, TiVo CEO Tom Rogers expressed confidence that his company’s relationship with Virgin will remain intact as Virgin is acquired by Liberty Global. Before the Virgin deal came into play, Liberty Global's next-gen video strategy has centered on its hybrid QAM/IP Horizon platform, which features Samsung boxes running the NDS (now Cisco Systems) software platform and user interface. 

“They’re working and engaged with us quite closely,” Rogers said of Liberty Global, noting that the companies had previously had little dialogue. “The more they’ve dug into the value that TiVo has provided to Virgin in terms of growing subs and reducing churn and really changing the whole competitive balance of the video marketplace in the UK, I think it’s fair to say that Liberty has come to appreciate the value that TiVo brings to Virgin more and more. They’ve gotten increasingly comfortable with how we can provide continued value to Virgin.”

But TiVo has much more going on with MSOs. Among other examples, ONO of Spain now has 166,000 subs taking the TiVo option, up 68% from the three months ago, while Suddenlink has installed about 80,000 TiVo devices. 

Following recent debuts with Midcontintent Communications and GCI, TiVo provided updates on what else is in the near term launch queue: ComHem of Sweden has started the pre-registration process for a service that will pair TiVo with its IPTV service and cloud architecture; Mediacom Communications  in June, to be followed shortly by CableONE.

TiVo also announced a deal with Atlantic Broadband, an MSO with 250,000 subs in seven states on the East coast.

Comcast and Cox Communications are taking different angles with TiVo. Instead of leasing TiVo devices to customers, they working to integrate their VOD services with TiVo boxes sold at retail. Comcast has that up and running in several markets already.

The deal with Cox is not active at retail yet “because we started turning our direction toward more IPTV-oriented solutions with Cox in terms of their next-generation activity,” Rogers said. “We’re in regular dialogue with them and working with them on a direction on how to do that.”

In the first quarter, TiVo shed 22,000 TiVo-owned subs, giving it total net additions of 255,000, up from 206,000 in the year-ago quarter, and 3.4 million total cumulative subscribers.

The subscriber upswing wasn’t enough to avoid a first quarter net loss of $10.3 million (9 cents per share), narrowed from a year-ago net loss of $20.8 million (17 cents per share). Revenues rose 22 percent to $82.6 million.

Looking ahead, TiVo expects second quarter revenues of $68 million to $70 million and a net loss in the range of $13 million to $16 million. Its patent fight with Google’s Motorola Mobility is scheduled to begin June 10.

September