Digital home entertainment services and solutions provider, TiVo Inc. (TIVO - Free Report) recently renewed a multi-year intellectual property (IP) agreement with Sony Corporation (SNE - Free Report) . However, the financial terms of the deal were kept under wraps.
This is second IP-licensing deal that TiVo has signed with an electronics company. Earlier in April, TiVo had entered into a licensing and multi-year IP agreement with Roku, Inc.
More on the Deal
Headquartered in Tokyo, Japan, Sony designs, manufactures and sales several consumer and industrial electronic equipments.
Per the deal, Sony now has a license to TiVo and Rovi Corporation patent portfolios. Additionally, the contract entitles customers of Sony to directly access TiVo’s high-quality entertainment metadata and other products.
According to Arvin Patel, executive vice president of TiVo, “This license agreement accentuates the value TiVo’s patent portfolios bring to the fast-growing and competitive entertainment industry.”
We believe that this licensing deal would be incrementally beneficial for the company. Additionally, the deal would provide the necessary competitive edge.
Going forward, TiVo’s strategy of including Sony makes its service more ambitious. The inclusion of Sony is anticipated tobring more users to TiVo and drive the sale of TiVo’s other digital goods. Consequently, the deal could help the company gain larger market share.
We believe that recent deals with leading companies along with new customer wins, product launches and international expansion will drive top-line growth.
It should be noted that TiVo was formerly known as Rovi Corporation. Upon successfully completing the acquisition of TiVo Inc. early this September, Rovi adopted the iconic TiVo brand name.
The merger has brought together two leading players in the media entertainment industry, with complementary products and services, as well as a number of patented technologies. The new TiVo Corporation is the global leader in entertainment technology and audience insights. The company has a diverse product portfolio that ranges from interactive program guide to DVR.
Apart from this, the combined company has over 6,000 issued and pending patents, which offer it a competitive advantage over other media and tech giants.
Nonetheless, the actual synergies from the merger will take some time to reflect in the company’s performance and a lot depends on how successfully it integrates the legacy business of TiVo.
The company faces significant competition from Alphabet Inc.’s (GOOGL - Free Report) Google TV, Roku and Apple Inc.’s (AAPL - Free Report) TV.
Notably, TiVo has lost 5% of its value year to date versus the 23.4% growth of its industry.
Currently, TiVo carries a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
See This Ticker Free >>