TiVo's still bleeding red-so what's their fate?

Yesterday, TiVo reported their third-quarter numbers. We're talking a net loss of $11.
Written by Russell Shaw, Contributor
Yesterday, TiVo reported their third-quarter numbers. We're talking a net loss of $11.1 millon. That's despite the fact that over the last year, TiVo-owned subs rose 24% to 1.6 millions, and cumulative total subs- including those through TiVo partners, are up 11% to 4.4 million. And churn is only 1% per quarter.

You'd think those are good signs. You'd think.

Perhaps that won't be enough.

TiVo's fourth quarter guideance is grim. They are projecting a net quarterly loss of $33 to $38 million, a non-trivial portion of their $107 million or so cash on hand. Total 4Q revenue is projected at $54 to $55 million, ten percent less than the current street estimate of $61.2 million.

Writing in TheStreet.com today, asset management pro and frequent Street contributor Scott Rothbort quanifies some of the ills that seem to keep TiVo from profitability.

"TiVo still faces a host of headwinds," Rothbort writes. "Its big push for holiday sales -- by offering free or discounted tuner boxes -- is not likely to drum up the additional revenue stream that Wall Street was expecting. Delays in certain advertising deals are not a positive development, either.

"The EchoStar litigation still hangs over its head," adds Rothbort. "In October, a U.S. Court of Appeals judge issued a stay of a lower court injunction requiring EchoStar to cut off DVR service to several million installed set-top boxes. On Nov. 27, the District Court judge in Texas denied all pretrial motions filed by EchoStar, clearing the way for further appeals of the injunction.

As to how this shakes out: 

"TiVois a real mess, and the only hope for its shareholders lies in the company being acquired," opines Rothbart.

I tend to agree. Throughout it's history- and I am a charter subscriber- TiVo has tried numerous strategic initiatives, and none of them have brought the company close to profitability. Acquisition is possible, and perhaps in shorter than the long-term. 

Time to let me know what you think.

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