TiVo on Thursday formally announce plans to split its IP licensing and product segments into separate standalone entities while the company pursues a sale of its assets.
TiVo said its product business, which includes and integrated video solutions, will be able to pursue a “customer-first strategy” and not be encumbered by the IP licensing business. The split will also enable the IP licensing segment to pursue a “broader horizontal licensing strategy.”
In 2018, TiVo’s IP licensing business generated $295 million in revenue, while its product segment brought in $401 million in revenue.
The company expects the split to be completed in the first half of 2020.
“In the rapidly evolving market landscape we now operate in, we have determined that our Product and IP Licensing businesses will be better positioned as standalone separate entities,” said Raghu Rau, interim president and CEO of TiVo, in a statement. “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.”
Rovi acquired TiVo in 2016 for $1.1 billion, adopting the name of the well-known set-top box and integrated video platform solution provider and bringing its own wide pool of licensed technology patents.
Speaking on TiVo’s first quarter earnings call Thursday, Rau said the separation “will have no impact” on the company’s willingness or ability to proceed with ongoing litigation against Comcast.
Comcast and TiVo have been battling in a multi-year dispute, fought on a variety of fronts, over IP licensing of Rovi/TiVo patents related to the cable giant’s popular X1 platform.
Rau said the current legal proceedings will happen within the IP business and TiVo fully expects that Comcast will “eventually be licensed.”
Rau provided an update on its dispute with Comcast, which includes a new complaint filed with the International Trade Commission on April 26, asserting Comcast infringes on six TiVo patents.
That complaint was preceded by a companion case filed in the Central District of California on April 22.
Some of the patents focus on DVR capabilities on Comcast’s X1 platform, according to Rau, including local DVR functionality, cloud DVR storage, and technology that allows users to stop watching content in one room and pick up where they left off in another.
“Two patents focus on aspects of how network data and requests for content are managed between set top boxes within a user’s home, including aspects of how network data from and to remote servers is managed,” Rau said.
Another patent relates to real-time data in an interactive program guide, Rau said, citing Comcast’s real-time sports score feature.
“We anticipate that the ITC case will start early in June 2019, with trial and decisions to occur in 2020,” Rau said.