TiVo seems to have finally found its groove again as the company saw its first increase in total subscriptions in four years.
Specifically, the total number of added subscriptions reached approximately 117,000 by the end of Q3 2011 -- drastically different from the 33,000 subscription losses during the second quarter of this year.
Basically, the key takeaway point is that TiVo stopped focusing heavily on retail sales and is distributing more through cable companies -- a strategy that appears to have worked.
For example, DirecTV intends to launch TiVo in select markets in December, and Comcast is offering TiVo in field trials now.
Tom Rogers, president and CEO of TiVo, explained in prepared remarks:
Our mass deployment efforts are proving successful and gaining momentum with Pay-TV operators worldwide. These operators recognize the need to retain their position as the key providers of a video experience for consumers. They are increasingly turning to TiVo because of TiVo's proven advanced television solution that enables them to extract more value out of the television experience by joining traditional linear TV channels with broadband delivered content while vastly upgrading the user interface.
However, not everyone is so pleased with TiVo's progress -- or perhaps, lack thereof. JMP Securities acknowledged in a report that TiVo is undergoing a major transition, but the firm doesn't seem to have a whole lot of faith in the DVR provider:
For the company’s stand-alone business, TiVo continues to subsidize the retail hardware price (a strategy that we do not fully support), and recognizes a slight profit if a new subscriber ($20 ARPU) remains for a minimum of 1.25 years. However, this is an eroding business and we have low expectations for it long term.
For the third quarter, TiVo recorded a net loss of 21 cents per share on a revenue of $51.8 million. Wall Street was looking for a third quarter loss of 23 cents a share on revenue of $50.57 million.
For the fourth quarter, TiVo anticipates service and technology revenues to fall within the range of $48 million to $50 million. Wall Street is expecting a loss of 23 cents a share on revenue of $51.54 million.
TiVo explained that higher expected litigation expenses related to AT&T/Microsoft cases as well as the flooding in Thailand are responsible for the more conservative outlook.
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