TiVo To Buy Digitalsmiths For $135 Million
TiVo To Add Content Discovery And Recommendation Service To Its
Cloud-Based Platform (Updated)
By: Jeff Baumgartner
Multichannel News
Jan 29 2014 - 09:01am
http://www.multichannel.com/distribution/tivo-buy-digitalsmiths-135-million/147973
TiVo is looking to shore up its cloud-based service offerings and expand
its customer base by putting up $135 million in cash for video discovery
and recommendation engine specialist Digitalsmiths.
CEO Tom Rogers said the acquisition will play a role in boosting TiVo’s
ability to commercialize and deploy TiVo’s cloud-based services
platform, which is adding a cloud DVR to the mix, and to offer those
services independently or in conjunction with TiVo’s user interface.
Digitalsmiths, which counts competitors such as Jinni and
ThinkAnalytics, has developed search and recommendation engines that can
run on multiple platforms, including set-tops, tablets, smartphones, PCs
and gaming consoles. It claims to have deals with seven of the top 10
pay-TV operators in the U.S., which serve about 64% of the country’s
pay-TV homes. The vendor said its cloud-based service handled 90 million
transactions in July 2013, growing to almost 150 million in December 2013.
Digitalsmiths’ previously announced customers and deployment partners
include Time Warner Cable, Cisco Systems, Warner Bros., Paramount,
Technicolor, Univision, Roku, Xbox, Sony PlayStation, Sharp, Turner
Sports, the National Basketball Association, the PGA, NASCAR, zeebox,
i.TV, and Australia’s Foxtel.
In an interview on Wednesday, Rogers said Digitalsmiths’ customers also
include DirecTV and TiVo’s former foe, Dish Network. TiVo, meanwhile, is
already working with about half of the top U.S. cable operators, as well
as several on in Europe, including Virgin Media and ONO of Spain.
The acquisition, he said, opens up TiVo to “a large number of
[operators] in the U.S. and some international operators that we did not
have relationships with.” He expects the deal to be EBITDA-positive for
TiVo this year and to be a “material” contributor to TiVos’ 2016 fiscal
year.
Founded in 2006, Digitalsmiths has raised about $31.5 million, according
to TechCrunch CrunchBase data.
TiVo expects to close the deal by the first quarter of its 2015 fiscal
year. Rogers said Digitalsmiths co-founders Ben Weinberger (CEO) and
Matt Berry (COO) will be joining TiVo, and expects that an “overwhelming
number” of Digitlsmiths employees will also join TiVo. TiVo, Rogers
added, also plans to maintain Digitalsmiths’ presence in Durham, N.C.
With respect to future M&A opportunities that fill gaps or enhance
TiVo’s platform, Rogers said TiVo will maintain its “cautious, balanced
approach.” Last year, TiVo was said to be among a small group interested
in buying video software firm SeaChange International, which, so far,
remains independent.
Separately, TiVo announced that it has increased its current stock
repurchase authorization by $100 million, giving the company
approximately $186 million of unused repurchase capacity. The company
said it intends to repurchase $100 million during the first quarter of
fiscal 2015.
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