Rovi Signs TotalGuide Licensing Pacts with Panasonic, Toshiba
Rovi appears to have resolved its patent battle with Toshiba, after Rovi executives said in a conference call that it reached agreement with Toshiba to embed its TotalGuide in flat-panel TVs in the U.S. and Europe starting in 2012. The licensing pact with Toshiba would appear aimed at settling a complaint Rovi filed with the U.S. International Trade Commission earlier seeking an investigation of its products with interactive program guides and parental controls. Rovi hasn’t signed a licensing agreement with Toshiba for Japan, but “remains hopeful” that a deal can be reached, Rovi CEO Fred Amoroso said. It wasn’t clear at our deadline whether Rovi would drop its complaint against Toshiba. Rovi officials weren’t available for comment.
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Rovi filed a similar ITC complaint against Sharp (CED Aug 1 p1). Amoroso didn’t mention that case during the conference call, but mentioned Rovi “entering a couple of litigation matters recently. We continue to see that most companies recognize the value of our patents,” he said.
Among the recent TotalGuide licensees is Panasonic which will build the guide into Blu-ray players and TVs, Amoroso said. Panasonic will use the guide in North America, Europe, the Middle East and Africa. Samsung adopted some portions of TotalGuide in its flat-panel TVs last fall. Samsung added Rovi Cloud Services to TVs and Blu-ray players this year, “contributing a healthy amount of revenue” to Rovi’s Q2 CE sales, Chief Financial Officer James Budge said. Sony also included Rovi’s cloud services and the RoxioNow video streaming platform in Bravia LCD TVs that shipped in May, Rovi officials said. Rovi forecast TotalGuide shipping in 10 to 15 million CE products this year. Other Interactive Program Guide licensees include Apple, Cisco, Comcast, DirecTV, Microsoft, Time Warner, Verizon and Yahoo. “More and more of them (CE manufacturers) are coming together and using the same user interface,” Amoroso said.
As TotalGuide gains footing into the CE products, RoxioNow, which Rovi acquired in buying Sonic Solutions earlier this year, has found its way into 50 million products, surpassing a target of 30 million units by June, company officials said. Best Buy’s CinemaNow, Blockbuster on Demand and Sears/Kmart’s service have deployed the RoxioNow video streaming platform. Best Buy has also launched CinemaNow in Canada, where it operates stores under its own banner and as Future Shop. CinemaNow also will be available on Sony’s Playstation 3 videogames console this fall. Two U.K. retailers also are deploying RoxioNow-based services, said Amoroso, who didn’t identify the dealers. Rovi also plans to build RoxioNow into TotalGuide by year-end and have it available for TotalGuide xD, which is designed for tablets and smartphones. RoxioNow has about 27,000 titles. RoxioNow and MainConcepts, which also was owned by Sonic and develops compression software, contributed $19.1 million revenue to Rovi’s Q2 consumer software business, which posted $32.9 million in sales, up from $12.3 million a year earlier. The gains in video streaming offset a decline in Roxio software sales, which includes DVD playback and burning.
RoxioNow also will likely play a role as Rovi brings TotalGuide by year-end to cable operators representing 10 million subscribers. The biggest of them is Charter, with 4.3 million subscribers, including 3.4 million that get digital service, Budge said. About three million of Charter’s 3.4 million digital subscribers currently get either Rovi’s i-Guide or passport IPGs, Budge said. TotalGuide will begin trial deployments with Charter in early 2012 and start field trials mid-year with a goal of generating some revenue for Rovi by Q3 2012, Amoroso said. In the U.S., Bend Broadband and Armstrong Cable also are using TotalGuide and TotalGuide xD. Rovi also recently signed IPG licensing agreements with unidentified IPTV operators in South Korea and Latin America and NTT Plaia, an IPTV service in Japan with 1.3 million customers, Amoroso said. TotalGuide deployments with cable operators will likely occur during the next 12 to 24 months, company officials said. At the end of Q2, Rovi had 18 million U.S. cable subscribers who either see a guide or a Rovi-produced product like iGuide or Passport, Budge said. There are 133 million global subscribers that view Rovi-based guides, including 33 million in Europe, he said.
As Rovi expands its digital business, legacy analog copy protection sales are expected to disappear by 2013, Budge said. The analog revenue will drop to $50 million to $60 million this year from $80 million to $85 million in 2010, Budge said. Analog copy protection for videotapes helped launch Macrovision, which changed its name to Rovi in 2009 after acquiring Gemstar TV Guide International the previous year.
Rovi swung to a $10.7 million Q2 net loss from a $41.1 million profit, as it took a $14.9 million charge for intangible assets related to its BD+ business, which is being sold to Irdeto for up to $25 million. About $13.5 million of the charge was tied to BD+, and $1.3 million was for severance related to a second round of restructuring at the former Sonic Solutions, the company said. Rovi’s total Q2 revenue rose to $193 million from $133.9 million as sales to CE manufacturers jumped to $85.6 million from $57.7 million. The Q2 CE business included $22 million from DivX, the company said. Cable-related revenue increased to $74.4 million from $63.8 million. Rovi’s BD+ revenue dropped to $700,000, flat with a year ago. An initial $2 million has been paid toward the sale of BD+, the company said.