Dish settlement pushes TiVo to quarterly profit

TiVo (Nasdaq: TIVO) President-CEO Tom Rogers should send a thank-you note to Dish Network (Nasdaq: DISH) Chairman Charlie Ergen. The DVR box/software company's $139 million first quarter profit can be tracked straight back to the banking of $175.7 million, part of the eventual $500 million Dish is paying out to TiVo as settlement of long-running patent infringement litigation. A year ago, while still embroiled in the Dish dispute, TiVo lost $14.2 million.

"It goes without saying that reaching a settlement of this magnitude with one of the industry's toughest defendants underscores the fundamental nature of our intellectual property," Rogers said during an earnings call within which he also warned that TiVo will continue to pursue its rights via patent.

The settlement and profit together show something else: TiVo's intellectual property is worth more than its set-top boxes, sales of which have been dropping like gangsters standing in drying concrete.

Rogers said that the valuable IP lets the company form new relationships with service providers and, for example, cut a retail deal with Comcast (Nasdaq: CMCSA) for "a truly all-inclusive digital cable set-top box" that offers "the only way a cable subscriber can get traditional linear television channels, video-on-demand from the operator and the best in broadband content from Netflix (Nasdaq: NFLX), Amazon, Hulu Plus, YouTube and Blockbuster all in one box."

Another cable provider, Charter Communications (Nasdaq: CHTR), is using a more traditional method "where the (TiVo) box is provided on a lease basis" by the operator. Still another model, with Virgin Media (Nasdaq: VMED), builds TiVo software into "somebody else's hardware," he said.

"We put ourselves in a position of having won more operator deals in terms of advanced television than anybody else out there," Rogers said.

For more:
- see this earnings release and attendant webcast

Related articles:
Comcast, TiVo team up on retail set-top box
Dish Network shares soar after TiVo settlement
Charter, TiVo converging TV and Internet

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