TiVo's Netflix Contract Demonstrates The Strength Of Company's Patent Portfolio
JPMorgan’s Sterling Auty maintains an Overweight rating on TiVo, with a price target of $34.
The Netflix Contract
“The licensing deal eliminates the ongoing legal battle between the companies over the ROVI patents,” Auty mentioned.
The analyst believes the agreement shows the combined strength of the TiVo and Rovi patent portfolio, which has “broader applicability.”
TiVo is likely to be able to leverage the agreement with Netflix to work on signing OTT providers it has yet to sign.
“The deal is a positive as it adds incremental revenue, although not huge at first, and eliminates the legal costs associated with Netflix litigation,” Auty went on to say.
Details Of The Agreement
Under the product agreement, TiVo would continue to integrate Netflix into its set-top boxes, enabling consumers to benefit from “unified search and Netflix button on remote controls.”
In addition, a separate intellectual property agreement provides a license to Netflix to the TiVo and Rovi patent portfolios for the over-the-top (OTT) offerings.
TiVo did not disclose any financial terms associated with the agreement, although the company reiterated its FY 2016 guidance.
Image Credit: By Jared C. Benedict (Own work) [GFDL, CC-BY-SA-3.0 or 2.5-2.0-1.0], via Wikimedia Commons
Latest Ratings for TIVO
|Jun 2016||MKM Partners||Downgrades||Buy||Neutral|
|Mar 2015||Macquarie||Initiates Coverage on||Outperform|
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