Breaking Up Of Products And IP Licensing: Tivo

Introduction

TiVo is one of the prominent leaders in the field of broadcast services. It is a digital video recorder capable of recording live TV programs. It was incorporated on August 4, 1997, as “Teleworld, Inc.” by Jim Barton and Mike Ramsay, veterans of Silicon Graphics and Time Warner’s Full Service Network digital video system.   It works in a form of set-top connected to the TV. TiVo allows viewers of TV to pause the content they are watching and record the same & watch it later and also transfer the same content via USB ports into one’s laptop or cell-phones.  The main highlight is that one can perform this function for live TV programs also. This provides viewers an altogether different experience of watching television. It also allows access to digital content providers like Amazon, Netflix, and YouTube on a subscription basis.

The company has also several Patents under their name in the field of broadcasting technology and it is involved in the IP licensing business. TiVo itself was acquired by Rovi Corp. for $1.1 billion in 2016, primarily for the many patents it holds related to online television viewing and the combined entity kept the name TiVo.[1]

Why the split is being done?  

The Company has made an announcement that it is looking to split its Product and IP licensing business as part of its corporate restructuring. Both the business is expected to run independently, providing the co-corporation to catch up on the latest market opportunities. This decision is the result of growing competition where streaming service providers have made it all too easy for viewers to watch their favourite shows according to their own wish of how and when they want to watch. TiVo in this regard has found it difficult to sustain itself in the market. The company had made few decisions in the past which did not go well for their product business.  Like for example, in the view of differentiating its product line with others, its newer Bolt DVR adopted an odd, angled shape that many users found it displeasing because of the fact that these new DVR models were required to be on display where the television set is located. Internet giant Amazon brought up its new product Fire TV recast which could be easily put behind the television set, and this was viewed as a more convenient product in relation to broadcasting services.  

The following descion of splitting has also been prompted out of the fact that the company, over the past few years was facing a significant amount of financial losses, around   $2.33 per share to end the fiscal year 2018.[2] TiVo initially looked for a scenario where it could manage one single company accruing its entire business but failed to do the same. 

TiVo’s business is categorized into two groups: Product and IP licensing through patent. The product business compromises of Platform Solution and Software and Service business. It provides applications for content creators to stream there content digitally which viewers can watch on their television sets. It also helps creators a trusted neutral platform to connect audiences to content and monetize transactions. The licensing business consists of Rovi and TiVo patent portfolios, which is in a total of 5,500 issued patents and pending applications worldwide. Millions of consumers get access to innovation of TiVo through license agreements with leading video providers around the world. The IP licensing business raked in $295 million in revenue in 2018, while its product unit had $401 million in sales.[3]

Effect of the separation

TiVo has intimated that the separation strategy has been followed for the purpose of focusing on innovation around the frontiers of new entertainment and communications that are developing beyond traditional footprints. The Company has been into a discussion with their investors regarding the outcome of the proposed decision and it is expected that the entire process of splitting the business should be completed by mid of 2020.

Several analysts have said that breaking the company into two entities will better position the IP licensing business to grow through a horizontal licensing strategy and take advantage of emerging growth opportunities, the company said. The IP licensing business will have better freedom to focus on innovation and address the “next phase of the consumer video experience”.

Author: Amit Ranjan, Legal Intern at Global Patent Filing. In case of any queries please contact/write back to us at support@globalpatentfiling.com.

References:

[1]https://techcrunch.com/2019/03/01/tivo-prepares-to-split-its-business-into-two-as-it-pursues-sale/

[2]https://www.multichannel.com/news/tivo-says-split-wont-affect-comcast-litigation

Leave a Reply

Your email address will not be published. Required fields are marked *

fourteen − fourteen =

Archives

  • June 2021
  • May 2021
  • April 2021
  • March 2021
  • February 2021
  • January 2021
  • December 2020
  • November 2020
  • October 2020
  • September 2020
  • August 2020
  • July 2020
  • June 2020
  • May 2020
  • April 2020
  • March 2020
  • February 2020
  • January 2020
  • December 2019
  • November 2019
  • October 2019
  • September 2019
  • August 2019
  • July 2019
  • June 2019
  • May 2019
  • April 2019
  • March 2019
  • February 2019
  • January 2019
  • December 2018
  • November 2018
  • October 2018
  • September 2018
  • August 2018
  • July 2018
  • June 2018
  • May 2018
  • April 2018
  • March 2018
  • February 2018
  • January 2018
  • December 2017
  • November 2017
  • October 2017
  • September 2017
  • August 2017
  • July 2017
  • June 2017
  • May 2017
  • April 2017
  • March 2017
  • February 2017
  • January 2017
  • December 2016
  • November 2016
  • October 2016
  • September 2016
  • August 2016
  • July 2016
  • June 2016
  • May 2016
  • April 2016
  • March 2016
  • February 2016
  • January 2016
  • December 2015
  • November 2015
  • October 2015
  • September 2015
  • August 2015
  • July 2015
  • June 2015
  • May 2015
  • April 2015
  • March 2015
  • February 2015
  • January 2015
  • December 2014
  • November 2014
  • October 2014
  • September 2014
  • August 2014
  • July 2014
  • June 2014
  • May 2014
  • April 2014
  • March 2014
  • February 2014
  • January 2014
  • December 2013
  • November 2013
  • October 2013
  • September 2013
  • August 2013
  • July 2013
  • June 2013
  • May 2013
  • April 2013
  • March 2013
  • February 2013
  • January 2013
  • December 2012
  • November 2012
  • September 2012
  • August 2012
  • July 2012
  • June 2012
  • May 2012
  • April 2012
  • March 2012
  • February 2012
  • January 2012
  • December 2011
  • November 2011
  • October 2011
  • September 2011
  • August 2011
  • July 2011
  • June 2011
  • May 2011
  • April 2011
  • March 2011
  • February 2011
  • January 2011
  • December 2010
  • September 2010
  • July 2010
  • June 2010
  • May 2010
  • April 2010