TiVo bought by RoVi? What does this mean?

The word is all over town that TiVo is being purchased by Rovi. This brings up two questions: Will TiVo still make, well, TiVos? and who the heck is Rovi?

First of all you can be forgiven if you have never heard of Rovi. The company started out making the Macrovision copy protection system that was part of commercially sold VHS tapes. As they grew, they diversified, which is a good thing since the market for VHS tapes is, let’s say, small. They evolved into a holding company for all sorts of intellectual property technologies, from CD ripping to (ironically) software to keep CDs from being ripped. They’re a licensing company now, making money off patents. Their purchase of TiVo makes sense, because TiVo still owns a lot of the patents that make not only DVRs but any sort of streaming video work.

This brings up the second question, which is “what will happen to TiVo?” The new company will be called TIVO (they’re straightening out the capitalization once and for all) so that seems to bode well for the consumer side of things. TiVo just announced a new Roamio DVR two days ago which would also seem to send a message that they’re going to stay in the hardware business.

TiVo has a reputation today as a “has-been” company which is really unfair. They were fairly dormant for several years as a result of a protracted lawsuit. While they won the initial suit, which confirmed that they owned certain patents, there were appeals and payment of damages was held up for years. This kept the company moving slowly while the legal wheels were turning. The last several years, however, they’ve turned out excellent products which really work well for cord-cutters, including multiroom DVRs like the Bolt which smoothly incorporate streaming, cable and antenna sources.

The challenge for TiVo as a company, and TiVo as a product, has been to overcome the advantages of company-supplied DVRs. While TiVo ruled the DVR universe from the late 1990s until the mid-2000s, cable and satellite companies started developing their own DVRs. The first generation models were pretty awful, but thanks to technology licensed from TiVo, the new ones are universally pretty good and sometimes excellent. That makes it hard for people to consider a third-party alternative.

For cordcutters, however, TiVo’s DVRs are the cream of the crop and as the cord-cutting revolution continues to grow, TiVo could once again become the name to know in DVRs.

Sure, Rovi is an intellectual property company and not a manufacturing company, but the fact that they are changing their name to TIVO really signals where they want to go. I suspect they will still make a fair amount of money (in fact probably the majority of their money) from licensing patents, but I wouldn’t expect the TIVO DVR to disappear from the shelves anytime soon.