TiVo in Social Media IP Deal, Will ‘Spin Out’ Product Company; Stock Down
TiVo signed a multiyear deal to license its intellectual property to “a major social media company, our first in this growing space,” said CEO Raghu Rau on a Q1 call Thursday evening. The DVR maker will separate its product and…
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IP licensing businesses into two publicly traded companies by first-half 2020. It hopes the deal will be “springboard” for future licensing agreements in those segments, he said. Several "web-based ad platforms" use video as a "form of communication," he said. On plans to “spin out” its product business and keep the remaining company as an IP licensing operation, “for many years, it was synergistic to have our product and IP licensing businesses combined,” said Rau. In “today's rapidly evolving market landscape,” the two businesses, “as stand-alone separate entities unconstrained by each other, will be better positioned to pursue growth opportunities,” he said. IP licensing “is a highly profitable business with revenue of $295 million in 2018, and a high percentage of this is recurring revenue,” he said. As video consumption “continues its shift beyond” traditional and pay TV into the “internet, social media and mobile domains,” the IP licensing business needs to be able to “diversify beyond traditional video content discovery and recording domains, into new consumer applications and functionalities,” the executive said. The stock closed down 14 percent Friday at $7.56.