TiVo‘s stock led the media pack yesterday, up nearly 4% after it announced that it will collect $250M from Verizon to settle their patent infringement dispute. And today it’s still on top, up about 3% to $10.25 in early trading. Lazard Capital Markets’ Barton Crockett helped this morning by upgrading his recommendation on TiVo stock to “buy” from “neutral” with a target price of $14. That’s a bit of a surprise: Yesterday, Crockett said that the Verizon settlement was “close to our expectations” and “not a sea-change.” But this morning he says that “upon further analysis” he concluded that the terms with Verizon make him “more optimistic” that TiVo will negotiate another settlement in its patent infringement case against Google’s Motorola Mobility, scheduled to go to trial this spring. “Google is seen by many as potentially a seller of Motorola Mobility,” Crockett says. “Settling the TiVo suit could make a Motorola sale much easier.” Brean Murray Carrett & Co analyst Todd Mitchell also says that the Verizon deal bodes well for the DVR pioneer. There’s a “high likelihood” the Motorola suit will be settled before trial because the business “cannot be priced with the overhang,” he says this morning. Cisco also might be motivated to resolve its differences with TiVo: If it doesn’t, then it would be “at a disadvantage pitching its home gateway business” from its recent acquisition of software company NDS, he says.

TiVo fighting the cable companies for the last remaining scraps from traditional tv broadcasting. It’s all (broadcasting) going online folks – tv shows will have their own URL’s and will stream right to your internet-ready tv. Ad dollars will flow to the websites that attract the most eyeballs. The home entertainment paradigm is about to make a very disruptive shift.
I remain amazed that a DVR is a patentable item-yet the market is only TiVo or a home made Home Theater PC. Even Sony gave up-I’ve one of the very few Sony HDD units, a consumer DVR with no subscription fee other than the cablecard.
My kids never watch appointment TV. Everything is recorded or streamed. I hope TiVo has an exit strategy.
Litigation is not a sustainable business plan.
And yet that’s all that TiVo seems to offer aside from a depressing lack of innovation. (Their new TiVo Stream is a joke.)
TiVo’s business model is fundamentally flawed, which is why their small subscriber base – now under 3 million – just keeps getting smaller. They haven’t sufficiently evolved to adapt to the changing landscape, and are hence increasingly irrelevant. Their inevitable obsolescence will only be hastened once Apple fully enters the market and crushes them like a bug.
P.S.: And BTW, I’m a TiVo customer who’s been with them since the very beginning.
People criticize Tivo for making its profits from lawsuits. Think of it this way…if you were nearly put out of business by competing products using your patented technology, wouldn’t you sue the pants off of them too?
Everyone tells me that Tivo is going out of business because of “cable-cutters” who watch on-demand TV instead of recording cable. That logic is fundementally flawed. Although some people will prefer to watch some of their shows over the web, media companies won’t turn over their premium content to subscription services like Netflix. You want good programming, you pay for it. If you want premium on-demand shows, you can purchase them on itunes, but if you add it up, you might as well pay for cable.
I expect Tivo to be around for a while, even if they make razor thin profits from consumers. A lot of smaller cable companies are partnering with Tivo to enhance their DVRs.
As a cord cutter for the past four years, my TiVo is the most indispensible part of that system. I have a good outdoor antenna and get over 40 OTA channels, most in beautiful HD. I do supplement the OTA content with Netflix, a ROKU, and Playon software for some good steaming options but its definitely the TiVo that has kept us satisfied these past four years with plenty of viewing options. Total montly cost $8! (we have lifetime service on our TiVo). I do agree that TiVo needs to stay on the cutting edge with there systems and need a better “whole home” solution than what they seem to be cobbling together currently. As far as the lawsuits, yes they have every right to go after companies that stole their patented products and took market share and momentum from them.