As expected, TiVo has announced plans to split its IP licensing and video products businesses as the company looks to sell its assets.
“Operating independently, these two businesses will have increased flexibility to pursue new and growing market opportunities. We believe this separation is the best way to maximize shareholder value, while also enhancing the possibility of value-creating strategic transactions,” said Raghu Rau, interim president and CEO of TiVo.
The current incarnation of TiVo was formed in 2016, when Rovi, a company steeped in patent licensing and program guides, bought Tivo—maker of set-tops and software-based platform solutions—for $1.1 billion.
TiVo expects the split to be completed in the first half of 2020.
TiVo made the announcement Thursday ahead of its first-quarter earnings report. IP licensing generated $295 million for TiVo in the quarter, while product sales accounted for $401 million.
TiVo reported a first quarter net loss of $26.1 million.
Speaking to investors during Thursday’s earnings call, Rau further elaborated—he seemed to indicate that it’s difficult to get companies to embrace platform technology products while twisting their arms to pay patent fees.
“We believe that by separating from our IP Licensing business, our product business can pursue a customer-first strategy, without the encumbrances of an IP licensing model, and this should increase receptivity for our next generation products,” Rau added.