TiVo Reports Wider Q1 Loss

May 24, 2006  •  Post A Comment

TiVo reported a wider first-quarter loss Wednesday as a new pricing structure and legal costs outweighed revenue gains in the period.

The digital-video-recorder pioneer lost $10.7 million for the three months ended April 30, compared with a loss of $857,000 a year ago. On a per-share basis, the red ink was 13 cents, compared with a one-cent loss last year. The company attributed the results to a new pricing plan for new customers, as well as legal costs tied to TiVo’s patent fight with satellite company EchoStar Communications. Expenses associated with stock-option compensation also played a role.

Revenue climbed 20 percent to $56.5 million as a result of development revenue generated from its relationship with Comcast.

After years of being at the mercy of DirecTV Group, which was its largest source of subscribers, TiVo embarked last year on a strategy to wean itself from the satellite company while at the same time driving up retail sales of its DVRs. The company also has looked to forge relationships with cable operators in order to broaden its customer base.

TiVo said it added 51,000 net new subscribers in the quarter, compared with 72,000 a year ago. The relationship with DirecTV generated 2,000 new subscriptions in the quarter, compared with 247,000 a year ago, when DirecTV was promoting the TiVo boxes. DirecTV has since stopped promoting TiVo DVRs in favor of DVRs from rival NDS Group.

The results also come as TiVo and EchoStar spar over DVR patents that TiVo has accused EchoStar of violating. A Texas jury found last month that EchoStar violated those patents, and awarded TiVo $73 million. However, this week EchoStar said the U.S. Patent and Trademark Office rejected several of TiVo’s patent claims, which EchoStar said bolsters its quest to overturn the jury’s verdict. TiVo has challenged EchoStar’s conclusion.