Rumor: DirecTV considering buying Tivo

[navychop]

How could revenues be growing when the customer base is declining, as DirecTV customers with old TiVo boxes replace them, and no new customers have been able to get a TiVo box for some time?

Whoever buys them will have a huge poison pill to deal with, unless they get the board to repeal it $omehow. Hard to pay a big premium when the outlook in the Dish lawsuit isn't looking too rosy lately.

 

[Peter Parker]

Tivo's customer baser includes more than just consumers. Here is a link to the first quarter results and it shows a growth in revenue. TiVo posts 5th straight quarterly loss | Reuters

 

[Tom Bombadil]

TiVo is now sold as a replacement for cable DVRs and boxes, and people using OTA. And people pay for subscriptions to use the service.

Their customer base does not include many D* or E* customers.

 

[Peter Parker]

Just be advised that some of these rumors are started by people who want to get into or out of certain investments. I dont really see much advantage to directv in owning tivo. Dish would have been smart to try and buy them out a few years back.

I suspect directv now thinks their product is as good as tivo's and I doubt we'll ever see a directv/tivo box.

I won't go so far as to say that this never happens but it is highly illegal and the SEC has pretty sophisticated trading models and aggressively prosecutes people for doing just that.

 

[stonecold]

Tivo has value to DTV just in patent rights. Replay+Tivo patents mean SOL for dish .

Charlie might as well give up and play nice and licence sling to dtv for free so he can keep his dvrs working.

 

[cfb]

I won't go so far as to say that this never happens but it is highly illegal and the SEC has pretty sophisticated trading models and aggressively prosecutes people for doing just that.

I'm sure they do, yet pump and dumps and short and distorts are something that happens each and every day. The SEC is only interested in the major cases.

On the revenue topic, buying a money losing company thats never been able to maintain a profit on their core business isnt really a very good idea, no matter what the revenue growth numbers. Thats like saying "You should buy this house. The rent you can get for it keeps going up and up and up! But you'll always lose money on it."

I suspect that Tivo will finally and once and for all win their suit against Dish, they'll collect their big chunk of money, they'll fritter it away over a period of a couple of years because they're managed by idiots, and someone will buy them someday when about all they have to offer is a patent portfolio thats declining in relevance.

But I dont think thats going to happen anytime soon and I'm betting the buyer will be someone in the software/advertising businesses like google or microsoft. Not dish or directv or any other programming intermediary.

After all, Tivo's soft spoken but quite obvious long term plan has been to replace the programming carriers with their box getting content directly from the programming providers, cutting the carriers out of the loop. Sadly, the prevalence of internet based content didnt happen by 2000, 2003, 2005 or 2008 like they thought it would. Its getting there.

 

[Peter Parker]

I'm sure they do, yet pump and dumps and short and distorts are something that happens each and every day. The SEC is only interested in the major cases.

On the revenue topic, buying a money losing company thats never been able to maintain a profit on their core business isnt really a very good idea, no matter what the revenue growth numbers. Thats like saying "You should buy this house. The rent you can get for it keeps going up and up and up! But you'll always lose money on it."

I suspect that Tivo will finally and once and for all win their suit against Dish, they'll collect their big chunk of money, they'll fritter it away over a period of a couple of years because they're managed by idiots, and someone will buy them someday when about all they have to offer is a patent portfolio thats declining in relevance.

But I dont think thats going to happen anytime soon and I'm betting the buyer will be someone in the software/advertising businesses like google or microsoft. Not dish or directv or any other programming intermediary.

After all, Tivo's soft spoken but quite obvious long term plan has been to replace the programming carriers with their box getting content directly from the programming providers, cutting the carriers out of the loop. Sadly, the prevalence of internet based content didnt happen by 2000, 2003, 2005 or 2008 like they thought it would. Its getting there.

The item under discussion here would be a case of running or painting the tape. That would be considered a big deal and the SEC goes after a lot of cases these days.

As for the revenue argument I tend to agree that long term Tivo isa dog unless they change the business model as you describe. i anyone is after them it is for the IP and the know how------or they see some way of making enough short term to make it worth the bother.

But whoever it is that poison pill will scare away most of the crew that are usually interested in hostile takeovers.

 

[iwc5893]

How could revenues be growing when the customer base is declining, as DirecTV customers with old TiVo boxes replace them, and no new customers have been able to get a TiVo box for some time?

Whoever buys them will have a huge poison pill to deal with, unless they get the board to repeal it $omehow. Hard to pay a big premium when the outlook in the Dish lawsuit isn't looking too rosy lately.

Doesn't the poison pill kick in only during a hostile takeover, or is it for any takeover?

 

[Brewer4]

I loved Tivo from the start. Now that the HR24 is out, I dont miss it one bit. I think its a good move for Directv to lock up the patents and gain some name cache but whether we see an MPEG4 HD Directv Tivo that does MRV, I am not really that concerned.

 

[whatchel1]

SkyReport

Well SkyReport is adding to the Rumormill today :Rumormill: Talk of a DIRECTV purchase of TiVo has surfaced. That's instead of DISH, which starred in the last round.

 

[Thomas22]

Replay and Tivo have (had) an agreement to mutually not try to sue each other over there respective patents since Tivo and Replay have the most patents on DVRs then any other company. This agreement not to sue each other into a blackhole of lawyer debt is something most tech companies do these days. It has been the case ever sense Apple lost it's case over there claim that windows 95 infringed on Apple GUI patents. Apple lost alot of money on that .

I don't think anyone has found any evidence of such an agreement. Both companies dropped their lawsuits without prejudice because Replay was about to go bankrupt anyway. That means they were free to sue each other again.

 

[cfb]

I dont think thats how it played out. Replay never entered bankruptcy although its assets were purchased by Sonicblue, who did later go into bankruptcy before being bought up by D&M. Tivo and Sonicblue sued and countersued, and later agreed to dismiss the cases. Both held enough solid patents in the dvr arena to create mutually assured destruction.

Directv later bought the replaytv assets from D&M, and therefore holds some key patents that makes them unpalatable for tivo to sue. Specifically:

United States Patent: 6324338

This patent awarded to replay is for "Video data recorder with integrated channel guides". It basically awards to them (and now directv) the ownership of any product made which allows you to record and play back television shows chosen from a channel guide.

Thats fairly strong stuff. You push too hard on that and directv says "Ok tivo, you have to pay us royalties for any dvr product you make. Oh, and you too Dish and Comcast, while we're at it".

Tivo does own a lot of patents around pausing live tv, some stuff around channel guides, and a lot of very specific aspects of the dvr.

But its pretty easy to see why tivo and sonicblue decided to let bygones be bygones. Also easy to see why tivo stopped making their products that worked with satellite tv when directv asked them to. Also easy to see why directv and tivo maintain a mutual agreement on their intellectual content.

 

[Juan]

I think it would be smarter to invest in Video over IP technology rather than waste money on yesterday's technology

 

[Aridon]

I think it would be smarter to invest in Video over IP technology rather than waste money on yesterday's technology

Until every movie and tv show is available on demand dvrs aren't going anywhere. Considering makers of said content have been very reluctant to let go of the old model I don't see true on demand broad enough to threaten the dvr for a very long time.

 

[RobbinM]

If Directv did by Tivo, I wonder if, as a condition of the sale, that they would be required to license the DVR technology to Dish for a minor fee. If the the Tivo sale could result in hurting 14 million Dish customers (by losing their DVR), sure that would be addressed before the sale was approved.

Didn't News Corp. have to agree to certain conditions with regard to the Fox channels before they could buy Directv a few years back?

 

[Aridon]

There is zero chance dish dvrs get turned off. The only thing that would happen is a settlement payment and license fees being paid for their dvrs.

I don't see an issue with a sale going through there are plenty of competing dvrs in the market.

 

[stonecold]

Since there no more dtv pirates , DTV legal department is probably bored and suing dish and everyone else might just be up there alley.

 

[riffjim4069]

I recall saying back in 2005/6 that the CE/MVPD industries should collectively buy Tivo and release their so-called patents to the public domain. It's a shame how few choices consumers have today for low-cost, high-quality DVRs.

 

[yaz96]

Too me I could see this being a good investment. Now it all depends on what Directv pays to develop software and future builds. If you figure costs to license features and develop it might be cheaper to do Tivo. Not to mention then they get an additional revenue stream from the current Tivo line up.

In the end I think Tivo will need to be bought up by someone as that part of the market is shrinking.

DirecTV won't have to pay a dime when Tivo goes out of business, so why waste the money on buying them?

 

[riffjim4069]

DirecTV won't have to pay a dime when Tivo goes out of business, so why waste the money on buying them?

Intellectual property rights (i.e., patents and trademarks) have value and can be sold/purchased just like any other asset. Plus, even if Tivo were to go out-of-business, their IP assets would be liquidated by shareholder/stakeholders just like any other tangible asset. Of course, anyone buying Tivo (with a limited shelf-life and mile-long litigation trail) at this point may have to have their heads examined. !sadroll

Love our Tivos...but hate their business model and lack of innovation the past few years.