Tag Archives: tivo

Patent Bully Rovi Gets Makeover With Acquisition Of TiVo

TV patent giant Rovi ( ROVI ) on Friday announced a $1.1 billion deal to buy digital video recorder pioneer TiVo ( TIVO ) and adopt TiVo as its new corporate name. San Carlos, Calif.-based Rovi agreed to pay $10.70 a share in cash and stock for San Jose, Calif.-based TiVo. The acquisition had been rumored for several weeks. Rovi stock was down a fraction to about 17 in afternoon trading in the stock market today . TiVo stock was up more than 5% to near 10. “Rovi’s acquisition of TiVo, with its innovative products, talented team and substantial intellectual property portfolio, strengthens Rovi’s position as a global leader in media discovery, metadata, analytics and IP licensing,” Rovi CEO Tom Carson said in a statement . “It’s an exciting time as the media and entertainment landscape undergoes a significant evolution. “The combined capabilities of TiVo and Rovi place us in a tremendous position to extend services across platforms and to a customer base that includes traditional, over-the-top and emerging players across the globe.” Rovi has earned a reputation as a patent bully for its litigious behavior. This month, Rovi sued Comcast ( CMCSA ) for patent infringement after failing to come to terms on a new licensing agreement. Last year, Netflix ( NFLX ) successfully defended itself from a Rovi patent infringement lawsuit. A U.S. federal judge ruled that the five Rovi-owned patents it wielded against the streaming video company were invalid. Rovi holds more than 5,000 patents in areas such as digital entertainment guides, DVRs and on-demand programming. It generates the majority of its revenue through patent-licensing agreements with pay TV services. Once the TiVo acquisition closes, the combined company will have over 6,000 patents. Piper Jaffray analyst Michael Olson looked favorably on the deal. “The rationale for the deal makes sense, with overlapping customers and organizational goals, and synergies that could make the combined business more profitable,” he said in a report Friday. “Specifically, the company is expecting $100 million of cost synergies and that the deal will be EPS accretive within the first 12 months.” Olson reiterated his overweight rating on Rovi stock with a price target of 29. Olson noted that litigation is a component of both companies’ business models.

TiVo Jumps 21%: Rovi Merger Would Combine Intellectual Property In Pay TV

TiVo ( TIVO ) stock surged on reports the DVR pioneer is in talks to be acquired by Rovi ( ROVI ), a provider of interactive programming guides to pay-TV companies and smart-TV manufacturers. Shares in TiVo surged 21% in the stock market today  by midafternoon. Rovi stock fell 4%. Both TiVo and Rovi hold intellectual property for features built into pay-TV set-top boxes and garner licensing revenue. Rovi and TiVo face big changes among their customers as the pay-TV industry faces growing competition from Internet video providers, such as Netflix ( NFLX ), Alphabet -Google’s ( GOOGL ) YouTube as well as new TV hardware from Apple ( AAPL ) and Roku. Federal regulators aim to open up the set-top box TV market . TiVo shareholders would reportedly get cash and stock in the deal and own about 30% of the newly formed company. TiVo has expanded beyond hardware sales and patent licensing to online subscription services. TiVo’s customers include small and midsize pay-TV companies. Analysts have said TiVo aims to provide more cable firms with next-generation features, including its cloud platform and mobile apps, analysts say. Apple and Google have been among companies rumored to be interested in acquiring TiVo in the past. Rovi gets an IBD Composite Rating of 86 out of a possible 99, though today’s drop puts it below its key 50-day moving average. TiVo holds just a 26 Composite Rating. “Together, the combined TiVo and  Rovi entity would have more than 6,000 issued or pending patents,” said Mike McCormack, a Jefferies analyst, in a research report. “TiVo alone has generated around $1.6 billion of settlements to date from patent enforcement lawsuits vs. Dish Network ( DISH ), AT&T ( T ), Verizon ( VZ ), and Cisco-Motorola-Time Warner. There are 380 issued patents in TiVo’s portfolio, plus 340 pending patents, many of which expire beyond 2018.”

Comcast, AT&T Fire Back As FCC Moves Ahead With Set-Top Box Proposal

Federal regulators Thursday moved forward with a proposal to make it easier for consumers to switch from set-top boxes leased monthly from pay-TV companies to new devices sold at retail by consumer electronics or Internet companies. Comcast ( CMCSA ), AT&T ( T ) and other pay-TV companies quickly criticized the Federal Communications Commission’s vote to begin making the new rules, calling it unneeded because of advances in Internet and app-based technology. Alphabet ’s ( GOOGL ) Google and Tivo ( TIVO ) are among companies that could gain from the FCC’s proposal. Roku, a maker of video streaming devices, has sided with cable TV industry partners amid the lobbying battle. FCC Chairman Tom Wheeler, an Obama administration appointee, said Thursday in a hearing that rising set-top box leasing fees have hurt consumers. The FCC, with a Democratic majority, voted 3-to-2 to begin a formal rule-making process. The agency aims to develop technical standards so that new hardware suppliers can provide access to programming sold by pay-TV companies. The FCC says that its set-top box initiative is not a threat to copyright protections, although pay-TV providers pay content companies for programming. Republican FCC member Michael O’Rielly said that it would take three years for new products to appear, because pay-TV companies would have two years to comply with any new technical standards for sharing programming. He added that technology innovation would render the FCC’s rules “obsolete” in the meantime. Comcast, in a blog post, said: “A new government technology mandate makes little sense when the apps-based marketplace solution … is driving additional retail availability of third-party devices without any of the privacy, diversity, intellectual property, legal authority or other substantial concerns raised by the FCC chairman’s mandate.” Comcast has stepped up deployment of Internet-ready X1 set-top boxes. The FCC proposal has pressured shares of  Arris International ( ARRS ), a supplier of set-top boxes to the cable industry; they were down 13% in afternoon trading on the stock market today , following the vote, but pay-TV stocks saw no big moves. AT&T, in a statement, said: “While consumers are embracing an apps-based approach that offers a variety of content on more than 450 devices, the FCC has chosen to go down a path that threatens the very competition that has led to a vibrant marketplace. As this proceeding continues, we hope these concerns are given the weight they deserve and the commission allows consumers and not Google to continue to drive the market.” By selling set-top box type devices, Google could target the TV advertising market, raising privacy issues, according to critics. Wheeler’s proposal could also impact Charter Communications ( CHTR ), Time Warner Cable ( TWC ) and  Verizon Communications ( VZ ), as well as satellite TV broadcasters DirecTV and Dish Network ( DISH ).