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TiVo Reports Record Income, Disney Deal

Alviso, Calif. — TiVo reported a record quarter for net income in its first fiscal quarter, ended April 30.

The DVR maker also said yesterday that its subscribers will soon be able to download movies from The Walt Disney Studios to their broadband-connected TiVo DVRs directly from the TV.

Net income for the first quarter was $3.6 million, compared with $835,000 in the year-ago quarter, while adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) was $11.1 million, compared with $6.5 million in the year-ago quarter. For the first quarter, service and technology revenues were $54.9 million, compared with $58.1 million for the same period last year.

“This quarter was about improving our financial profile by managing our subscription acquisition costs, making progress on our key growth initiatives such as our mass distribution strategy, and protecting our intellectual property,” said Tom Rogers, president/CEO.

Concerning its deal with Disney, the titles will be available to rent through an agreement with Disney-ABC and CinemaNow, one of TiVo’s broadband partners. The companies will offer the movies for a 24-hour rental period in standard definition, with many also available in high definition.

The service is scheduled to be available to all broadband-connected TiVo Series2 and Series3 subscribers later this year. TiVo offers more than 30,000 titles through Amazon Unbox, Music Choice and more than 50 other content providers. The company recently announced that TiVo subscribers will be able to access YouTube videos directly on the TV via the TiVo DVR this summer.

In discussing events during the quarter Rogers commented on the EchoStar suit, saying, “The Appeals Court unanimously upheld the District Court’s ruling that EchoStar had infringed on our patent and more recently denied EchoStar’s petition for a rehearing en banc. We are pleased the court upheld the ruling for full award of damages and an order for the injunction to be reinstated.”

Rogers mentioned TiVo being available on Comcast’s New England region since early this year, with a further rollout in the area expected “very soon.” TiVo service on Cox, which is currently in trials, is on track for a launch in Cox’s New England market later this year, Rogers said.

TiVo-owned subscription gross additions for the first quarter were approximately 48,000, compared with 57,000 gross additions for the year-ago period. This is the lowest year-over-year quarterly decline since the third quarter of fiscal 2007. Overall, TiVo-owned subscriptions ended the quarter at 1.7 million. Cumulative total subscriptions as of April 30 were 3.8 million. Additionally, the monthly churn rate was 1.3 percent, down from 1.5 percent in the prior quarter.

TiVo also confirmed its partnership with the Chicago Tribune, which will allow TiVo subscribers to download the recommendations of the newspaper’s TV critic directly to their televisions so these recommendations are waiting there when the TV set is turned on.

Rogers also noted TiVo’s plan to bundle DVRs and HDTVs with CE leading retailers and manufacturers to bundle TiVo with HD television sales during the quarter has worked well. “We plan to expand these bundling efforts and are hopeful that our early successes will translate on a broader scale,” he said.