Once upon a time, it seemed all over-the-top articles centered on cord-cutting. But that has shifted in recent months to a belief that the TV industry is moving toward a model that combines linear TV and over-the-top video. TiVo CEO Tom Rogers said he knew it all along.
"Our view has always been that the merger of linear TV and streaming OTT is where the future of TV is," Rogers said during the company’s earnings conference call late last Tues. TiVo reported a net income of $12.5mln in 3Q, exceeding guidance of $6-8mln. That compares to a net income of $59mln last year, which included one-time litigation proceeds of $78.4mln related to its settlement with Verizon. Cable "has the ability to jump over the experiences offered by its competitors" by merging their services with OTT services, he said, adding that Netflix has "risen to the level of a ‘must have’ on the OTT side" driven by its deep library of content and quality original programs.
Others seem to agree, with Netflix’s stock price up more than 280% YTD. TiVo is teaming with Virgin Media in the UK to offer Netflix to subs through TiVo’s set-top box, following a trial that kicked off a few months ago. One obstacle of offering a Netflix-linear package in the US might be studio restrictions that limit where content on Netflix is distributed, Rogers said.
What’s the TiVo chief exec’s view on Intel Media’s OTT/virtual MSO platform, which was reportedly put on sale for $500mln? Given the cost of programming, it’s hard to provide a service that offers both streaming and linear content unless cable is a partner, he said, comments right in line with TiVo’s business plan.
During the quarter, TiVo added about 300K MSO subscriptions, up nearly 25% from the year-ago quarter. About 80% of the increase in net adds was driven by MSO providers other than Virgin, the company said. Spain’s ONO continues to rapidly deploy with TiVo. The acceleration of MSO customer growth has led to TiVo’s strongest sub addition results since it launched the cable operator business. In 4Q, expected net income is in the range of $2mln to $5mln, helped by a potential increase in MSO revenue.
Meanwhile, TiVo continues to make noise at the FCC over CableCARDs. TiVo counsel met with FCC chmn Tom Wheeler’s sr counselor last week and pushed for action on its petition. It wants the agency to clarify that CableCARD rules remain in effect following a Jan decision by the DC Court of Appeals that threw out encoding rules. "We urged the Commission to act expeditiously in order to remove uncertainty… and to provide consumers and retail manufacturers with certainty that navigation devices purchased at retail will continue to receive cable signals that consumers have subscribed to," TiVo said in an ex parte.
It also told the FCC that a successor conditional access solution is needed to assure the availability of bidirectional video signals to retail devices, but that the CableCARD solution must remain in place until a new standard is ready. NCTA opposes TiVo’s petition, arguing that it’s not merely seeking to reinstate the CableCARD rules, but is asking to have the FCC impose them on only on cable operators and not their competitors. TiVo’s CableCARD-focused day at the FCC also included a summary of its arguments against Charter‘s 2-year waiver to the set-top integration ban.
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