TiVo has been in operation since 1999, but its fourth quarter (2014) showed that the numbers for its core business are anything but stagnant. TiVo added 324,000 subscribers in Q4, bringing its total subscriber base to 5.5 million (30% YoY growth). The company also continues to forge new partnerships with multi-service operators, and these relationships generated a 40% YoY increase in revenue.
Still, as TV Everywhere and OTT solutions become more popular, TiVo’s set-top box business and DVR partnerships with cable providers can only grow so much. This is part of the reason why TiVo has purchased Aereo’s trademark and mailing list for $1 million in a bankruptcy auction.
In a call with analysts following the earnings release, TiVo CEO Tom Rogers said:
We have a much more extensive offering than what Aereo had, which was principally a way to record over-the-air channels. We integrate over-the-top with over-the-air into a much more comprehensive offering with a far more sophisticated user experience that we think not only drives the value proposition that Aereo didn’t, but truly is in sync with where the ecosystem is going for those level of customers who are looking for something that is able to get them the guts of the broadcast world in a way that they can record it without having to have an operator subscription, and at the same time, unifies that with the OTT product to make that a single viewing approach to all their video needs.
TiVo undoubtedly had a more extensive offering than Aereo did, but Aereo was most appealing to cord-cutters. TiVo’s partial acquisition of Aereo signals that it will go after this broadband and OTT-only customer base with vigor.
TiVo will likely use the mailing list it acquired from Aereo to help push the ‘TiVo Roamio DVR,’ which is an over-the-air-first product. TiVo announced at the end of February a partnership with Frontier Communications to offer the Roamio as a cable alternative. “Operators are saying we have to figure out a way for our broadband-only customers to relate to video,” Rogers told The New York Post last week. “And they’re thinking our OTA [over-the-air] devices could be an interesting way to do that.”