MultiChannelNews 05/26/10 TiVo Loses 96,000 Subscribers In Q1 DVR Maker Ends Quarter With 2.509 Million Subs TiVo's distribution deals with cable and satellite operators -- and its redesigned Premiere set-top box -- have so far failed to offset its continued subscriber declines, as the DVR maker posted its fifth straight quarterly loss. The company reported 2.509 million cumulative subscribers for the quarter ended April 30, 2010, compared with 2.605 million three months earlier. TiVo ended the most recent quarter with 1.41 million TiVo-owned subscribers -- versus 1.62 million a year earlier -- and 1.10 million through pay-TV operator partners, including RCN, DirecTV and Comcast, down from 1.57 million at the end of the first quarter of 2009. Still, TiVo noted that the decline in subscribers through TV operators has narrowed versus previous quarters. TiVo president and CEO Tom Rogers said most of the losses in the segment have been a function of DirecTV subscribers who have the older, non-HD version of TiVo. DirecTV has a new deal with TiVo under which the companies now expect to introduce a premium HD DVR by the end of 2010. In the most recent quarter TiVo introduced the Premiere DVR line, which became available at retail in late March, featuring an interface designed for 16-by-9 TVs and enhanced search and discovery features. Revenue for the quarter ended April 30 was $61.4 million, compared with $55.1 million in the year-ago quarter and was TiVo's highest first-quarter net revenue in three years. TiVo reported a net loss of $14.2 million, beating its previous guidance of a net loss of $19 million to $21 million, compared with a $3.9 million net loss in the year-ago quarter. The company blamed increased legal expenses as well as research and development expenses relating to new products and distribution for the year-to-year increase in losses. Meanwhile, TiVo is awaiting a full review by the U.S. Court of Appeal for the Federal Circuit of a previous ruling upholding a Texas federal district court's finding that Dish Network and EchoStar were in contempt of an order to disable DVRs that were found to infringe a key TiVo patent. Rogers, in a statement Tuesday, called the latest development in the EchoStar/Dish dispute "disappointing because the en banc process will take many months to complete." "In its order to grant an en banc review, the Court did not raise any specific issues with respect to the facts of our case against EchoStar," Rogers said. "As such, we believe that this order is instead about an opportunity for the Court to clarify a number of key policy issues with respect to patent law. With that said, we remain confident in our position as we believe the facts continue to support the well-reasoned and carefully applied decision from the Texas court, just as the facts supported our case the two prior times we argued an appeal in front of Federal Circuit judges." Separately, TiVo has patent lawsuits pending against Verizon and AT&T, both of which have filed countersuits against the DVR company. For the second quarter of fiscal 2011, TiVo expects service and technology revenues in the range of $40 million to $42 million, and a net loss in the range of $17 million to $19 million, which includes expected increased litigation expense and higher research and developmentcosts due to increased product development and distribution.