TiVo grows cable subscribers, but litigation expenses sap profits

TiVo reported that it picked up 235,000 subscribers during its first fiscal quarter of 2013, through deals with pay TV distributors such as Virgin Media, DirecTV, RCN, Suddenlink and Grande Communications.

But for the quarter ended April 30, it reported a net loss of $20.1 million (17 cents per share), thanks mainly to increased litigation expenses from patent lawsuits with Verizon, Motorola Mobility, Time Warner Cable and other companies.

CEO Tom Rogers said he expects that TiVo will see significant growth from cable MSOs, pointing to deals it has with major MSOs such as Comcas and Charter Communications. Comcast recently began allowing subscribers who buy TiVo set-tops in retail outlets to access its Xfinity On Demand lineup, and Charter also plans to integrate its digital cable product with TiVo's Premiere DVR. RCN, Suddenlink, Grande and other small and mid-sized MSOs are using TiVo as the primary DVR offered to digital video subscribers.

TiVo is also poised to drive subscriber growth by supplying cable operators with a solution that could help them deliver programming to Apple's iPad and other mobile devices, Rogers told analysts on TiVo's earnings call. The company unveiled a TiVo Stream device at The Cable Show in Boston which lets users watch programming stored on their DVRs on an iPad.

"The major components of our subscriber growth will be a variety of MSOs that we are implementing with, and the deals that we announce are all gaining subscriber momentum as we see it over the course of the year," Rogers said.

TiVo generated $67.8 million in net revenue during its fiscal first quarter, up about $22 million compared to this time last year.