Xperi Signs Pact for Imax Enhanced With 'Major' Streaming Service
Xperi’s Q1 revenue of $221.6 million, in line with expectations, included $98 million in IP revenue with 30% from media IP, said CEO Jon Kirchner on a Wednesday earnings call. But overall IP revenue dropped 28% due to a $60 million decline in semiconductor IP, a segment Xperi is working to “reposition for future growth,” said Kirchner. The company reaffirmed its fiscal 2021 revenue outlook of $860 million-$900 million.
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The increase in media IP revenue reflects a “step-up” in baseline IP receipts from a Comcast license, along with “significant momentum” in license renewals with companies including Cox, Sony and TCL, Kirchner said. Xperi also renewed a pact with Frontier in the quarter, he said.
Xperi made “solid progress” on key initiatives including growing the footprint for TiVo 4K Stream, expanding the Imax Enhanced ecosystem, advancing discussions with OEM partners for AutoStage and AutoSense automotive solutions, boosting adoption of its IPTV self-installed solution and further developing the software platform tool set for customers of Perceive, its edge-based neural network platform, Kirchner said.
Xperi signed a multiyear agreement with Xiaomi for Imax Enhanced on the Chinese company's TVs. Content is key to growing the Imax Enhanced ecosystem, and Xperi signed a “significant agreement” in Q1 with a major North American streaming service that will support Imax Enhanced delivery, said Kirchner. Details will be given at launch. In Q1, Xperi released an update for its software encoding tools to enable easier and more cost-effective enhancement of film and episodic libraries for Imax Enhanced, Kirchner said.
Subscriber churn in pay TV contributed to a 13% decline in total product revenue in Q1, said Kirchner. In the Consumer Experience category, revenue was $51.3 million, down 19% year over year. Pay-TV revenue fell 16% to $52.3 million and was down 6% sequentially due to subscriber churn “consistent with industry trends and a shift in revenue allocated under our customer contract in favor of the IP business,” Kirchner said. Xperi expects subscriber declines in its legacy business to be partially offset by increasing average revenue per user as the business shifts to IPTV. Demand for the TiVo IPTV service grew 100% in Q1 on a “small, but rapidly growing base.” The company is making progress on an embedded OS for smart TVs with the TiVo Stream platform, said Kirchner, and it's exploring other ways to monetize TiVo Stream. The number of activated TiVo Stream 4Ks media players grew quarter over quarter, he said.
Xperi moved from a three-phase to a two-phase approach with TiVo Stream 4K, said Kirchner after “Google came out and said that they intend to go beyond their core OS level offering and really get into the UX business.” That eliminated a plan to offer a TiVo interface choice on top of Android TV as a phase between its dongle offering and a fully embedded TiVo OS, he said in Q&A. The company is now “working aggressively on getting our solutions embedded in TVs in a deeper level,” Kirchner said, and it believes it has a unique solution "that drives higher engagement and therefore, greater monetization for everybody involved in the ecosystem."
On the content front, the TiVo Plus service added Amazon’s IMDb TV ad-supported service in Q1, along with Paramount+ and TV Everywhere, with content from ABC, CBS, Fox and NBC, Kirchner said.
Connected Car revenue grew 16% to $20 million, on a “return to strength in automotive sales,” Kirchner said, saying 14 new models launched with HD Radio technology in North America. Xperi licensed nine new AM digital stations following the FCC’s approval of all-digital AM broadcasting (see 2010230064).
Xperi is building out broadcast and content infrastructure for DTS AutoStage, rebranded from Connected Radio in February (see 2102090017), while engaging with carmakers, said Kirchner. It developed five new broadcast apps for 36 stations in Europe and signed aggregation agreements in Asia and Europe. It licensed TiVo metadata to a top five global streaming music service, which will facilitate the use of advanced features in DTS AutoStage, now live in 30 countries. DTS received ISO 9001 certification for software computer vision technologies in its AutoSense in-cabin monitoring platform, Kirchner said.