TiVo "Non-DVR" Software to Be Integrated into Connected TV's from Best Buy's Insignia Brand

--Legal and R&D Expenses Widen TiVo's Q1 Losses

TiVo and electronics retailer, Best Buy, said Tuesday that development is underway to integrate TiVo's software and advanced TV services (though not the TiVo platform's core DVR functionality) into new connected TV sets from Insignia, Best Buy's in-house consumer electronics brand. The companies did not say when the sets will be available and how much they will cost. This represents the first time that TiVo's software has been integrated directly into a TV set--though the company has announced several deals to integrate it into third-party set-top boxes (see, for example, the article on TiVo's new deal with Technicolor that was published on itvt.com, May 24th). The integration of TiVo technology into Insignia connected TV's follows the announcement last July of a five-year partnership between TiVo and Best Buy that called for TiVo "to work with Best Buy's Exclusive Brands group (e.g., Insignia, Dynex, etc.) to explore integration of its user interface, search, and other TiVo benefits to help further grow that consumer electronics line."

According to the companies, the new Insignia TV sets will provide consumers with an "exceptional, intuitive" user experience for accessing online content, by utilizing the latest TiVo non-DVR software and advanced television service (note: TiVo DVR's currently provide access to a range of broadband video services, including Netflix, Amazon VOD, blip.tv and others; meanwhile, Best Buy recently announced a broadband video service of its own, dubbed CinemaNow and powered by technology from Sonic Solutions). TiVo's content will give viewers a "one-stop shop" for delivering and searching content right on the television, the companies say (note: the integration announcement between TiVo and Best Buy comes just a few days after it was revealed that Best Buy has been tapped by Google to sell devices based on its new Google TV platform--see the article published on itvt.com, May 24th). "Consumers tell us they want the best of Internet-based content delivered right to their televisions without the hassle of having to fumble with multiple devices, wires, and remotes," Fernando Silva, VP of Best Buy Exclusive Brands, said in a prepared statement. "The beauty of TiVo software is that it creates a single interactive interface right on the television and integrates the myriad of online content and services. Insignia is thrilled to work with TiVo to bring this superior experience to our customers through our TiVo-powered Insignia television." Added Jim Denney, TiVo's general manager and VP of product marketing: "TiVo has evolved into so much more than a DVR. We are able to customize and deliver solutions that best meet the needs of our partners like Insignia with the ability to integrate TiVo's software and advanced television services onto either set-top boxes or consumer electronics devices in a non-DVR capacity to deliver one of the best in-home entertainment experiences for consumers. We are extremely proud to be teamed with Insignia to bring the TiVo experience to this leading consumer electronics brand and we look forward to continuing to work with Best Buy on possible future endeavors."

TiVo also released financial results, Tuesday, for its fiscal first quarter, ended April 30th:

  • Service and technology revenues totaled $43.2 million, compared to $48.5 million for the year-ago quarter and $45.3 million for the prior quarter.
  • Net revenues totaled $61.4 million, compared to $55.1 million for the year-ago quarter and representing the company's highest Q1 net revenue in three years.
  • Adjusted EBITDA was a loss of $6.7 million, compared to a profit of $5.3 million for the year-ago quarter. The company said that "increased legal spend as well as research and development expenses relating to new products and distribution were a significant driver" of the decline.
  • Net losses totaled $14.2 million ($0.13 per share), compared to losses of $3.9 million for the year-ago quarter.
  • TiVo-owned subscriptions added during the quarter totaled 33,000, compared to 37,000 for the year-ago quarter.
  • At the end of the quarter, TiVo-owned subscribers totaled 1.41 million, compared to 1.62 million for the year-ago quarter; while subscribers from pay-TV providers that use its platform (such as DirecTV, Comcast and RCN--the latter of which has now begun rolling out TiVo service in New York City) totaled 1.1 million, compared to 1.57 million for the year-ago quarter.

In the conference call with financial analysts that followed TiVo's release of its Q1 results, CEO Tom Rogers downplayed the possible threat to the company posed by Google's newly announced Google TV platform: "On the Google front, it really is a real contrast with what [TiVo's flagship DVR] Premiere represents," he stated, in response to an analyst's question. "Premiere represents a one-box solution. You get your linear television service, you get your broadband service, and you get that all in a single interface, single search, single remote, all of the benefits of having everything available in a single box. Google TV really represents a two-box approach. You have your operator box and, in addition to that, you have your Google box, and your Google box presumably provides broadband content. We've seen that two-box solutions don't particularly work. I think Apple TV demonstrated the limitations that consumers have with wanting a separate box different from their primary television box for what they bring to the set."

North America