Wider Losses for TiVo Expected
TiVo, pioneer in personal video recording (PVR) technology is expanding, but the company is expected to bleed in its finances due to legal battles and stiff competition.
The Alviso, Calif., company reported a quarterly loss of $6.45 million, or 7 cents a share, up from $892,000 or a penny per share in the same period of 2005.
Revenue rose 50 percent to $59.2 million, from $39.3 million a year ago, with the company boosting its year-over-year subscriber count by 24 percent to 4.4 million as of July 31.
The company is spending heavily on marketing, in an effort to further expand its reach. TiVo is also involved in a costly litigation to protect its technology from being copied. Along with this, other companies offering similar services or services that can potentially enroach on TiVo’s user base (such as video-on-demand) are gaining ground.
The losses are likely to expand as the company increases its marketing spending to entice new customers. In its current quarter, TiVo expects to lose $12 million to $17 million on revenue of $54 million to $56 million. Analysts are projecting on average a loss of $14.8 million, or 16 cents a share, on revenue of $54.6 million.
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Rogers would not break out how much money TiVo spent on legal battles. But the company reported Wednesday that “general and administrative” expenses — a category that includes payments to some accountants, lawyers, consultants and technologists — swelled to $11.09 million last quarter, up from $8.41 million in the same period of 2005.
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The company has seen its competitive position shrink as cable companies, satellite television operators and electronics makers scramble to offer a version of the DVR. But TiVo has claimed successor models infringe its 2001 patent on the underlying technology and that makers should license the technology.
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