TV Suppliers Deploying Rovi’s TotalGuide, Media Cloud Services

Top-tier TV suppliers with Internet-connected platforms are bypassing Rovi’s TotalGuide for its media cloud data services, while those “playing catch up” are opting for the full-blown interactive program guide (IPG), Rovi CEO Fred Amoroso said in a conference call. Among the CE suppliers, Samsung is deploying Rovi’s media cloud and advertising services as part of a Smart TV platform that starts shipping in March.

Rovi unveiled a cloud-based services developer program at CES (CED Jan 4 p1) as part of an effort to extend the reach of the TotalGuide IPG, focusing initially on video and music metadata applications that draw from the acquisitions of All Media Guide and Muze. The cloud-based strategy gives Rovi partners access to metadata that provides detailed information on movies and music without having to embed its products.

The use of both cloud-based services and embedded IPGs is key for Rovi as it signs licensing agreements that spread its technology across the Internet, mobile and set-top box applications, company officials said. Rovi signed cross-platform licensing deals with Apple and Comcast last fall and has since added Cox Communications and Cablevision. Cablevision will convert its 3 million subscribers to a Rovi IPG from Cisco’s Scientific-Atlanta Sara guide. Rovi’s IPG is replacing Sara in about 8 million STBs, 2-3 million of which have already been converted, said Rovi Chief Financial Officer James Budge. The cross-platform pacts are expected to produce incremental annual revenue in the “tens of millions” of dollars, Amoroso said. “We believe these multi-year agreements go a long way toward unlocking the potential of the cross-platform guide approach,” Amoroso said.

The new pacts also are changing the licensing terms from an annual fee to a monthly per subscriber royalty in the case of Cablevision, company officials said. As a result, the prices licensees are paying are increasing ranging from 50-75 percent for those deploying components of the Rovi platform to more then 100 percent in the case of a full IPG, company officials said. The terms, including contract length, vary depending on the application, Amoroso said. While satellite and cable STB pacts typically run 5-10 years, those governing mobile are shorter, he said.

An increasingly larger component of the IPG and media cloud platforms is advertising, which doubled revenue in 2010 to $15-$20 million and is expected to continue to increase this year, Budge said. Rovi’s advertising booking during the first six weeks this year were up 437 percent from the same period in 2010. The number of conventional advertisers that had signed on rose to 10 at the start of this year from four a year ago, company officials said. Among Rovi’s conventional advertisers are Dell and Ford. Rovi’s Passport 3.5 and 3.6 IPGs being deployed in the U.S., Canada, Mexico and other international markets supports the advertising platform. The advertising system is available in 30 million U.S. households and will reach 50 million by year-end partly driven by the conversion of Sara IPGs, which will carry per subscriber royalties, Amoroso said.

To further its advertising business, Rovi formed a partnership with Delivery Agent that brings to Rovi-powered IPGs on TVs, Blu-ray players and STBs the ability to use a remote to buy goods showcased on or connected to network and cable programs.

A screen shot of NBC-TV’s The Biggest Losers program page shows a bodybugg armband that helps viewers track their fitness goals like participants in the show. A show listing with a “shop” badge informs viewers that a related product is attached to the page. The service, which will be built across Rovi’s platforms, will debut in Q2 with NBC-TV’s The Biggest Losers and The Office and A&E Network’s History Channel’s Pawn Star. The programs require that viewers sign up for Delivery Agent’s TV Wallet to make purchases. A banner in the lower part of the screen will appear promoting DVDs, clothing and other items tied to the programming. The banners will be shown while a viewer is reading or choosing a show. The viewer is taken to another area for shopping. Delivery Agent works with 35 networks and programmers representing 425 TV shows. Delivery Agent has data on 1,200 items which will be integrated into Rovi’s advertising platform that’s transmitted from offices in Tulsa, said Jeff Siegel, Rovi senior vice president of global media sales. The service will be available for Internet-connected TVs and other CE products within 90 days. It will launch on networks within 45 days, Delivery Agent CEO Mike Fitzsimmons said. Rovi and Delivery Agent will share revenue on product sales, analysts said. Siegel declined comment of terms of Rovi’s agreement with Delivery Agent.

Rovi expects to close on its $720 million acquisition of Sonic Solutions late this week, Amoroso said. Rovi will gradually integrate its technology with Sonic products, including its personal media manager for the RoxioNow video download service. RoxioNow was available in 10 million products as of late December and will pass 30 million by June, company officials said. Marvel Technology is adding RoxioNow to its processors, company officials said. DivX, which Sonic Solutions purchased last fall, generated $73 million in revenue in 2010. “There has been good strength in DivX-related businesses,” Amoroso said.

Rovi’s Q4 profit improved to $67.2 million from $2.6 million a year ago due to a $40.7 million income tax benefit. Selling, general and administrative expenses rose to $40.6 million from $34.6 million a year earlier as Rovi incurred $5.2 million in costs related to its purchase of Sonic Solutions. Q4 revenue rose to $140 million from $137.1 million, despite a decline in CE-related sales to $52.4 million from $61.2 million. Services revenue increased to $70.4 million from $62.4 million, while revenue from data services and other jumped to $17.2 million from $13.4 million, the company said.