Xperi has signed China-based Skyworth as the latest partner to build smart TVs running the TiVo TVOS, bringing the company’s OEM partner tally to five.
Xperi CEO Jon Kirshner disclosed the partnership Wednesday, speaking on the company’s fourth quarter and full-year 2023 earnings call, saying Skyworth plans to integrate TiVo OS into its 2024 smart TV lineup.
On the TVOS front TiVo already counted four partners, with Vestel, Sharp and Konka among them. It also signed UK consumer electronics retailer Argos, which will sell TiVo-powered smart TVs under its Bush TV house brand.
Vestel is already shipping TiVo-powered smart TVs in seven European countries, including the UK and Germany, and expects to continue expanding into additional countries in Europe, selling TVs under more than a dozen brands. Sharp and Argos are expected to have TiVo-powered TVs in retail stores across Europe and the U.K., respectively, this spring.
It marks a slow but steady buildup of OEM partners as Xperi aims to monetize connected TV advertising through its smart TV operating system and has a target of at least 7 million active TVs running the TiVO OS by the end of 2025. On that path, Kirchner said his goal for this year is to see the TiVo OS in all five major European countries, as well as the U.S. market, and to exit 2024 with six TV OEMs and an active footprint of over 2 million smart TVs. It expects TVOS monetization to be relatively flat during the first two quarters of 2024 but begin to ramp in the second half of the year.
TiVo is one of the players competing in the increasingly competitive TVOS space. In an earlier interview with StreamTV Insider when TiVo TVOS ambitions were just kicking off, Xperi Chief Products and Services Officer Geir Skadden at the time cited its position as a content-agnostic independent media platform that can be attractive to OEMs, where partners “can brand the experience, retain customer ownership, and participate in the long-term economics in a different way than some of the big tech walled gardens are offering today.”
But with a target of only adding one additional TV OEM partner by year-end, analysts on Wednesday’s earnings call questioned whether it’s incrementally harder for the company to secure new TVOS wins.
Kirchner said no, noting there’s a universe of OEMs who don’t develop and license their own proprietary systems, including larger and smaller players, with Xperi “engaged with a number of parties.” The company has its eye on a subset of partners, he said, with which it feels good about achieving its 2025 target of an installed base of at least 7 million units.
“I think we’re very focused on achieving those core milestones,” Kirchner commented. “I think there’s clearly upside there and I think we’ll continue to engage with partners, so that number ticks up over time.” But as of now, it’s following specific plans to deliver on its targets and securing a sixth OEM this year is part of that, he added.
Media platform fastest-growing segment in 2023
The TiVo TVOS falls within Xperi’s media platform business – which marked revenue declines in Q4 but was the company’s fastest-growing segment for the full year.
In Q4 Xperi reported Adjusted EBITDA of $13.4 million and total revenue of around $137 million, up 1% year over year, bolstered by growth in its consumer electronics and connected car segments. Within that, its media platform business, which includes TiVo OS, TV viewership data, IPG/CTV advertising and its Vewd licensing business, contributed $12.1 million in revenue, representing a 34% decline over Q4 2022. The company attributed the drop to lower revenue related to a prior year minimum guarantee contract for its smart TV middleware solution and a yoy decline in monetization because of last year’s dual Hollywood writers and actors strike that pushed fall premiers into 2024.
Even though the unit declined in Q4, for the full year 2023 the media platform and TVOS business grew, generating $49 million in revenue, up 23% compared to the prior year period. By the end of 2025, Xperi expects its media platform and TVOS business to generate more than $190 million in revenue.
Xperi also has a pay TV segment that includes its legacy core pay TV products (including classic guides, discovery, and consumer hardware and subscriptions) and Video-over-Broadband (IPTV) offering. In Q4 pay TV segment revenue declined 1% to $66 million and was down 2% for the full year to $245 million. While the legacy pay TV business has seen declines alongside larger industry-wide contractions, it continues to be Xperi’s largest revenue contributor, and the IPTV part of the segment has marked growth. For the full-year, video-over-broadband (IPTV) generated $60 million in revenue, up 38%, and ended 2023 with 1.9 million IPTV subscribers. Full year revenue for Xperi’s core pay TV business declined 10% yoy to $185 million. Xperi’s total revenue for 2023 grew 4% to $521 million.
The IPTV solution has launched with multiple new service providers including Hawaii Telecom and EverFast Fiber. Xperi aims to have at least 2.8 million IPTV subscribers by the end of 2025, generating $100 million in revenue. The company also recently launched TiVo Broadband, which is a streaming-based service for broadband-only customers. Earlier this week it announced four new operator partners signed on for the service, including Buckeye Broadband, Blue Stream Fiber, Blue Ridge Communications and Bluepeak.
2024 goals for the IPTV business include securing at least 10 additional TiVo Broadband customers and ending the year with an IPTV footprint of at least 2.4 million subscribers.