After TiVo’s brief glimpse of profitability in Q1 thanks to a $500 million patent settlement it won from DISH Network and Echostar (NSDQ: SATS), the DVR provider is back to net loss territory, even as revenue gains were healthy. Revenues aside, TiVo (NSDQ: TIVO) continued to see subscribers fall off: in Q2 it lost 456,000 subs and now has 1.9 million.
TiVo’s problem in retaining subscribers appears to be similar to what the cable companies have been experiencing over the past year. For the most part, the weak economy has caused consumers to cut back on non-essential items. If anything, more than the cable companies, TiVo, which was always viewed as a choice item among tech savvy, affluent consumers, may be a victim of the other over-the-top services like Roku and Netflix (NSDQ: NFLX), which have made time-shifting cheaper and easier than ever before. Furthermore, TiVo also has to contend with competition from the MSOs themselves, as most offer some DVR function.
In order to hold back the dam against subscriber erosion and attract new ones, TiVo has been striking deals with pay TV providers such as existing ones with RCN, Suddenlink, and Virgin Media (NSDQ: VMED). Deals with Charter (NSDQ: CHTR), DirecTV (NYSE: DTV), and ONO are expected to roll out shortly and, TiVo hopes, build its subscriber numbers back up.