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Spotlight: Tivo Inc. | Costs are wiping out profits
by lilhurricane Sunday 30-May-2010
Digital video recorder pioneer TiVo Inc. recently reported a net loss in the first quarter -- its sixth consecutive money-losing quarter as the company struggled with higher legal expenses and other costs that wiped out an increase in revenue.

While TiVo has a loyal following among hardcore television fans who believe its user guide is superior to those offered by cable boxes, the company has had a history of losses typically resulting from higher hardware and research-and-development costs. Now, a six-year lawsuit against satellite-TV company Dish Network Corp. for allegedly infringing on a DVR technology patent is taking a toll on the bottom line.

In recent years, TiVo has been lessening its dependence on DVRs sold directly to consumers as the main source of revenue by licensing its software to subscription-TV operators such as cable company Comcast Corp., or letting them use its DVRs as their own, such as the case with RCN Corp., another cable provider. TiVo also has slashed prices on DVRs to consumers and marketed the units through more retailers.

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