TiVo Inc. (NASDAQ: TIVO), the creator of and a leader in television services for digital video recorders (DVRs), today reported financial results for the fourth quarter and fiscal year ended January 31, 2007.
Key points:
- Service and Technology revenues increased 22% year-over-year to $57.4 million in the fourth quarter
- Net loss was $18.7 million in the fourth quarter, compared to a net loss of $21.1 million in the year-ago quarter
- Adjusted EBITDA loss was $14.2 million in the fourth quarter, compared to a loss of $19.9 million in the year-ago quarter
- TiVo-Owned subscriptions increased 16% year-over-year to end the year at 1.7 million
- Amazon Unbox on TiVo officially launched and now broadly available
Key Fiscal Year 2007 Highlights:
- Made significant progress on TiVo’s mass distribution strategy as the Comcast product entered trials and the Company signed an agreement with Cox Communications;
- Established TiVo as a leader in providing broadband content directly to the television set, by introducing numerous broadband content initiatives, including the announcement last month with Amazon, providing the only TV-centric approach that brings broadcast, cable and broadband together;
- Launched a number of distinctive features, including the TiVoCast service, which enables the delivery of broadband content and home movies on TiVo DVRs, TiVo KidZone, Guru guide recommendations and TiVo Product Watch;
- Unveiled the TiVo Series3â„¢ High Definition Digital Media Recorder, considered by many retailers to be the first successfully-launched CableCard consumer electronics product;
- Signed comprehensive advertising deals with the world’s largest advertising holding companies including, Interpublic Media, WPP’s GroupM network of agencies, and Omnicom Media Group’s OMD and PHD business units, as well as deals with leading television advertisers, including General Motors, BMW, Lexus, Sprint, HP, and Nintendo;
- Announced deals with CBS, International Creative Management, NBA, Reuters, New York Times, CNET, BellSouth, Verizon Wireless, Rhapsody, among many others, adding to the list of significant companies, such as Yahoo!, Intel, and Sony, that have aligned themselves with TiVo in developing their future relationship to the television world;
- Extended the agreement with DIRECTV for an additional three years, allowing TiVo to continue to receive subscription fees for the existing 2.7 million DIRECTV TiVo subscriptions;
- Established an international distribution deal with Cablevisi�³n Mexico, the largest cable operator in Mexico City;
- Strengthened TiVo’s intellectual property position with a trial court victory against EchoStar in the United States District Court, Eastern District of Texas.
To me, these is the most interesting piece:
“As TiVo enters Fiscal 2008, we believe there are five engines that will drive the Company’s momentum in the coming year that didn’t exist last year.
- First, delivering broadband content directly to the television becomes a reality this year through our deal with Amazon, as well as through our other broadband content features such as TiVoCast, Home Movies via OneTrueMedia, which provides friends and family a private channel to view personal content through their TiVo service, and the TiVo Desktop autotranscode functionality, which gets internet video off of the Web and displays it on the TV set.
- Second, our mass distribution strategy becomes a reality as the TiVo service on Comcast product is expected to launch in its initial market in the near-future and Cox is targeted for initial market availability later this year.
- Third, we came out of the holiday season with the full attention of our retail partners focused on the important role that TiVo can play in their goal to offer bundles of High Definition television products and services to consumers. We will be highly focused this year on launching a lower-priced, mass appeal High Definition product.
- Fourth, for the first time, TiVo plans to advertise throughout the year with a far more extensive effort to educate the market on TiVo’s superior brand and the service’s highly differentiated features.
- Fifth, we believe our financial model will move us significantly closer to Adjusted EBITDA break-even for Fiscal Year 2008 and substantially improve the perception of the Company’s long-term financial prospects.
Along with the growing momentum in our advertising sales business and the opportunities internationally, we believe these five engines will demonstrate that TiVo has the tools in place necessary to grow TiVo’s subscription base and solidify our critical role within the media landscape in Fiscal Year 2008 and beyond.â€
The most interesting bit, to me, is buried in the middle –“We will be highly focused this year on launching a lower-priced, mass appeal High Definition product.” Sounds like we’ll be seeing a ‘Series3-lite’ sometime this year. I wonder what they can drop to reduce the costs… Maybe a smaller drive, but you can’t really go lower than 120-160GB and still have enough HD recording capacity. I don’t think going single-tuner is in the cards – on the call they even said they will not be focused on single-tuner devices going forward. Less expensive tuner blocks and dropping OTA support? Seems like a big loss for a little gain. Most likely I think the chassis will be simpler – no fancy OLED front panel, maybe no front panel controls, less expensive remote, etc.
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