TiVo splits business into 2 independent companies

TiVo Bolt DVR
TiVo Bolt (TiVo)

TiVo announced that after months of strategic review the company has decided to split its business into two independent companies, one focused on products and the other on IP licensing.

TiVo intends to spin out its Product business to shareholders, and the company said that throughout the process it will continue to be open to strategic transactions for each business. TiVo said it’s actively engaged in discussions with parties interested in each of the businesses.

“In the rapidly evolving market landscape we now operate in, we have determined that our Product and IP Licensing businesses will be better positioned as standalone separate entities,” said Raghu Rau, interim president and CEO, in a statement. “Operating independently, these two businesses will have increased flexibility to pursue new and growing market opportunities. We believe this separation is the best way to maximize shareholder value, while also enhancing the possibility of value-creating strategic transactions.”

FREE DAILY NEWSLETTER

Like this story? Subscribe to FierceVideo!

The Video industry is an ever-changing world where big ideas come along daily. Cable, Media and Entertainment, Telco, and Tech companies rely on FierceVideo for the latest news, trends, and analysis on video creation and distribution, OTT delivery technologies, content licensing, and advertising strategies. Sign up today to get news and updates delivered to your inbox and read on the go.

RELATED: TiVo swings to Q4 loss amid talks to split product and licensing businesses

TiVo provided some of its reasoning behind the decision to split up its businesses.

The product business, which TiVo said now has an estimated 23 million households worldwide and generated $401 million in revenue last year, will be able to pursue a “customer-first strategy” without being tied to an IP Licensing business. Specifically, TiVo is hoping for “greater receptivity” to its products and services from service providers, content providers and device manufacturers.

A notable current example of how TiVo’s IP licensing business may be hurting its product business is TiVo’s ongoing patent infringement legal battle with Comcast. The IP licensing business, which TiVo said generated $295 million in revenue last year, will be able to pursue a broader horizontal licensing strategy and capitalize on emerging growth opportunities after the split, according to TiVo.

“As video consumption continues to shift beyond traditional Pay TV into internet, social media and mobile domains, we believe it is important that the IP Licensing business can diversify beyond traditional video content discovery and recording domains, into new consumer applications and functionalities,” TiVo said a news release.

TiVo expects to complete the business split in the first half of 2020. The company will announce management teams and boards for both companies before the separation is completed.

TiVo's decision to split accompanies its first-quarter financial results, marked by a 17% decrease in revenue but also a 16% decrease in operating costs, resulting in an overall improvement in quarterly operating losses.

Suggested Articles

AT&T TV Now – formerly DirecTV Now – is raising prices for its streaming television service for the second time this year.

Xandr, AT&T’s advanced advertising and analytics business, has acquired clypd, a TV advertising data platform for broadcast and cable TV networks.

Quibi, an upcoming mobile-first streaming service, has found a logical distribution partner in T-Mobile.