TiVo, the maker of DVRs and advanced television platforms for pay-TV operators, reported a $24 million net loss for the third quarter on a 27% net revenue gain to $64.7 million. For the first nine months of the year, the company posted net income of nearly $95 million versus a $50 million loss for the same period in 2010 on a 5% net revenue gain to $171 million.
The losses in the third quarter were partly due to legal costs that accrued as the company gears up for at least one patent infringement case in January, being brought against AT&T in Texas. That trial is scheduled to begin Jan. 4. The company is also preparing for a separate trial against Verizon, which it is suing on similar grounds. The next pre-trial conference in that case, also being heard in Texas, is scheduled for January 9.
On a conference call late Tuesday afternoon, company CEO Tom Rogers said that protecting patents is a key strategic objective for the company. Earlier this year, TiVo won a $600 million judgment against satellite TV operator Dish Network for violation of its DVR patents.
The company is also betting big on providing DVR and other advanced TV services to cable and satellite operators worldwide. DirecTV will launch a TiVo-supplied advanced television offering next month. Deals with Charter and Comcast will kick in soon.
Outside the U.S., the company has a deal with Virgin Media in the UK and ONO in Spain. Rogers said Virgin has credited TiVo with helping to grow its subscription base by 40% in the third quarter.
With operators around the globe (accounting for several hundred million subscribers) preparing to make the transition to advanced TV, TiVo is poised to capitalize on a “huge opportunity,” said Rogers. For the operators, Rogers said, it’s cheaper to purchase turnkey platforms from third parties than to build them from scratch. And those enhanced services also help operators retain and build subscriber growth, he said.