Updated: Court blocks Permanent Injuction ordering DISH DVRs disabled

[Greg Bimson]

Mr. Brimson, with you demostrated knowledge of the law, what would happen if TiVo should go belly-up and file for bankruptcy. Would the patents in question go on fire sale by the court? Looking at thier financial picture, I find nothing viable in the company, certainly not worth investing in.

The main source of "profit" right now at TiVo are the licensing contracts with DirecTV and their hardware customer base.

The reality is at this stage of the game, TiVo will not go belly-up. Since TiVo has recurring revenues until the DirecTV contract goes away, TiVo would simply cut costs.

However, if TiVo were to ever go belly-up, the bondholders have first say at how the company is liquidated. Because the main source of revenue is tied to the patent (the DirecTV, Comcast and Cox deals along with the Dish Network judgment), someone would buy it for recurring revenues. It wouldn't be pennies on the dollar.

Think of all the software companies that would like to add a television piece to their portfolio, the main one here being Microsoft. You think maybe as a differentiator to PS3 or the new Nintendo box, the next version of X-Box would have TiVo?

 

[normang]

nice thought.

You might want to check into the phrase "poison pill" and what it means. Tivo has one.

Poison pills didn't exactly do Peoplesoft any good against Oracle if i recall correctly...

 

[Tom Bombadil]

I have a hard time believing that a company the size of Tivo could have a poison pill big enough to stop a company the size of Echostar from swallowing them.

 

[wayne231]

Mr. Bimson

The main source of "profit" right now at TiVo are the licensing contracts with DirecTV and their hardware customer base.

The reality is at this stage of the game, TiVo will not go belly-up. Since TiVo has recurring revenues until the DirecTV contract goes away, TiVo would simply cut costs.

However, if TiVo were to ever go belly-up, the bondholders have first say at how the company is liquidated. Because the main source of revenue is tied to the patent (the DirecTV, Comcast and Cox deals along with the Dish Network judgment), someone would buy it for recurring revenues. It wouldn't be pennies on the dollar.

Think of all the software companies that would like to add a television piece to their portfolio, the main one here being Microsoft. You think maybe as a differentiator to PS3 or the new Nintendo box, the next version of X-Box would have TiVo?

I respectfully beg to differ with your conclusions. First, the courts, not the secured creditors, would manage the liquidation of assests, if any. From the financial report I gather they would not be any with the exception of "good will" which would very little. The revenue's currently generated by the patents are not currently enough to cover expenses. TiVo has now thrown all their efforts into the up-coming "Series3" box. Whether or not they have the capitol to produce a marketable box is very questionable. Second, I see no circumstance where any software company would spend any money at all for the patents. In case you haven't noticed, Microsoft, ATI et all, have already produced time shifting, pause, rewind and other so called "TiVo" functions without infringing. It is my understanding that you cannot patent a "Concept" but only the method. But, this is only my opinion, I could be wrong.

 

[Greg Bimson]

I respectfully beg to differ with your conclusions. First, the courts, not the secured creditors, would manage the liquidation of assests, if any.

Of course the courts "manage" the liquidation of assets, but the first priority goes to the bondholders.

From the financial report I gather they would not be any with the exception of "good will" which would very little. The revenue's currently generated by the patents are not currently enough to cover expenses.

Like I said, the only true "revenue" right now comes from the TiVo contract with DirecTV, and then there is revenue that comes from TiVo's recurring monthly charge from their standalone subscribers. Most of the expense seems to be production-related, i.e., the building of the TiVo box.

TiVo has now thrown all their efforts into the up-coming "Series3" box. Whether or not they have the capitol to produce a marketable box is very questionable.

Very agreed. It isn't like a series 3 is going to set the world on fire.

Second, I see no circumstance where any software company would spend any money at all for the patents. In case you haven't noticed, Microsoft, ATI et all, have already produced time shifting, pause, rewind and other so called "TiVo" functions without infringing. It is my understanding that you cannot patent a "Concept" but only the method. But, this is only my opinion, I could be wrong.

The "method" that TiVo has patented is regarding the ability to do fast-forward, rewind, and slo-mo while recording a stream (I think). The patent involved implements this using one true processor. Using only one true processor allows TiVo to keep the hardware cost down.

Think about it. If Dish Network had two processors in each of their DVR's so that one could handle the recording while the other handled the playing/FFwd/Rew, they would cost quite a bit more.

 

[dishcomm]

i would like to know how dish plans to just buy out tivo? first, tivo would have to be willing to sell. that's not going to happen with all the royalties they are getting from the cable co's and directv.

Tivo is a publicly traded company....Echostar could simply buy a controlling interest in the company...It's called a hostile takeover...
Tivo in it's pursuit to stay independent could only do one thing..Buy it's own stock....
Of course Echostar would have to make a tender offer to the tivo stockholders....
If I am off base here, I apologize..But as a product of the 80's I remember vividly the days of ther hostile take over and other buy out realted stuff...

 

[tnsprin]

Tivo is a publicly traded company....Echostar could simply buy a controlling interest in the company...It's called a hostile takeover...
Tivo in it's pursuit to stay independent could only do one thing..Buy it's own stock....
Of course Echostar would have to make a tender offer to the tivo stockholders....
If I am off base here, I apologize..But as a product of the 80's I remember vividly the days of ther hostile take over and other buy out realted stuff...

Poison pills would trigger unless they kept the current managemnet.

TIVO is structured so tha it will probably not be that easy to buy out. Most likely is

1) Dish successfully introduces modifications that bypass the TIVO patents, making TIVO eventually fail. Assets would not be worth attempts to buy out, as other DVR manufactures will make similar mods (unless Dish patents them)
2) Dish gives in and all others DVR's have to follow, making Tivo solvent.

 

[GeorgeLV]

I have a hard time believing that a company the size of Tivo could have a poison pill big enough to stop a company the size of Echostar from swallowing them.

I doesn't matter if there's no poison pill. Do you really expect Echostar's competitors to stand still if they made a TiVo bid? I'm sure many of their competitors would be interested in acquiring TiVo if it meant they could cripple Echostar's business.

 

[Stargazer]

cough DIRECTV cough

 

[Poke]

Just saw a new AD on TV ran by Cox cable saying why stay with Dish since there is a chance the 3 million Dish customers might loose their DVR funtion... I think its BS that they are trying to make one TV service company drop theirs and not Cox and Direct! If they make one they should make them all!! Anyway Cox cable is running the AD trying to make folks switch to them due to the DVR fear.. Anyway all DVR folks should be writeing to the FCC and their local goverment officals. If they make one drop the DVR service they all should.. Everyone should boycott Tivo thats for sure next thing they will say you cant record with your VCR what a JOKE TIVO IS!!