Rovi Says It’s Developing Direct-to-Consumer Software Applications

Rovi is developing TotalGuide direct-to-consumer software applications and will make parts of the IPG available to MSOs as an upgrade to current set-top boxes, Rovi executives said on a conference call. The company, which signed a licensing agreement with Apple, demonstrated an iPad application earlier this fall that connects the tablet PC to TotalGuide-enabled and non-Rovi guide set-tops, CEO Fred Amoroso said.

"We're still playing around in the app space and trying to find out what the right strategy is,” Rovi Senior Technology Director Adam Powers told us at the Digital Hollywood conference in New York in November. “I would say expect to see a lot more apps from us in the next year or so. A lot of our strategy is a multidevice guide, because a lot of people have their content spread across a wide array of devices."

Rovi has been weighing developing direct-to-consumer software download applications for more than a year but is “sensitive” to avoiding competing with customers, Amoroso said. “We recognize that consumers have applications that they may want through tablets and the mobile environment,” he said. Rovi will craft widgets or applications that can be offered to consumers through service providers or as part of a CE platform.

The upgrades to existing cable set-tops will use a subset of TotalGuide involving the IPG, but it will likely lack the full-blown recommendation and search features, company officials said. The deployment also may vary by market, with cable operators in very competitive markets possibly choosing the upgrade path and those in smaller markets awaiting shipments on new set-tops, Powers said. The first trials with cable using the full TotalGuide will likely begin in late 2011, Amoroso said. The software download will solve a “short-term problem today” while leaving cable room to further upgrade without “being so pressed by capex limitations,” Amoroso said.

Rovi also is replacing Cisco’s Sara IPGs with its own Passport at two cable operators and expects to complete “millions” of the upgrades in 2011, which will generate revenue “in the $10 million plus range,” Amoroso said. The Passport 3.5 version being used allows for advertising and is being deployed in Latin America, including with Cablevision in Mexico.

On the CE side, Rovi will have its TotalGuide deployed in 10 million to 15 million U.S. homes in 2011 through TVs, Blu-ray players, network area storage devices and other products, Amoroso said. Samsung shipped LCD TVs in September containing a subset of TotalGuide features including the IPG and navigation, Powers said. Most TotalGuide-equipped CE products will start shipping in Q1, Rovi officials said.

Meanwhile, Rovi swung to a $36.8 million Q3 profit from an $11.9 million loss a year earlier as sales jumped to $138 million from $114.5 million as it benefitted from revenue from Apple. Service provider revenue increased to $65.7 million from $57.2 million, while that from CE manufacturers, including Apple, rose to $57.8 million from $44.2 million. Rovi has an IP-based content patent licensing agreement with Apple. Rovi also posted a $5.8 million gain on the sale of strategic investments. Rovi sold Norpak, which makes equipment for embedding data in a TV signal, during the quarter. Norpak generated $1 million in Q3 revenue. Rovi also extended its licensing agreement with BSkyB during Q3 and signed a deal with Telstra, which is deploying a hybrid broadband and free-to-air service in Australia.