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TiVo Reports Q2 Results, Announces Pact With Cablevision

Aug 24, 2005  •  Post A Comment

Digital video recorder company TiVo got another boost from the cable sector Wednesday after multiple system operator Cablevision Systems agreed to test market TiVo’s DVR product as part of the cable operator’s triple-play package of video, voice and data services.

Separately, the company said it posted a second-quarter profit of $240,000, versus a year-earlier loss of $10.8 million. Revenue for the three months ended July 31 slipped slightly to $39.3 million from a year-earlier $39.8 million.

As part of the deal with Cablevision, TiVo will run tests of its DVR with a wireless router, enabling users to use the service without the need for a telephone line to transmit relevant data required to record programs. The DVR used in the Cablevision tests will rely on Cablevision’s high-speed Internet service, which will be accessed via a wireless router.

The deal marks the latest in a string of pacts that TiVo has struck with the cable industry. Earlier this year the company entered into a long-term pact with Comcast to deploy TiVo’s DVRs and software in Comcast set-top boxes. That deal, and subsequent alliances with other cable operators, breathed new life into TiVo, which has largely relied on its reselling relationship with satellite operator DirecTV for growth. However, DirecTV has indicated that it is looking to de-emphasize its ties with TiVo, in favor of a DVR product from rival NDS Group, which, like DirecTV, is controlled by Rupert Murdoch’s News Corp.

Meanwhile, the company’s financial results marked the first time that TiVo had earned a profit, but it could be the last time for a while. The company warned that to deploy a more aggressive marketing plan to drive the growth of its own subscribers, the company was forgoing its previously stated goal of achieving sustained profitability by the fiscal fourth quarter.

The company also announced it would end its practice of giving subscriber growth estimates.

Much of TiVo’s growth for the past several years has been driven by the DirecTV relationship. Though TiVo saw its subscriber base grow by 254,000 to 3.8 million subscribers, DirecTV accounted for 214,000 of those new subscribers, while TiVo-owned subscriptions accounted for the other 40,000, down from 63,000 a year ago.