) recently announced a partnership with Midcontinent
Communications. According to the terms of the agreement,
Midcontinent Communications will use TiVo's solutions and products
to offer next generation home television services to its
Midcontinent Communications provides data, video, phone and
cable advertising services to residential as well as business
clients of Minnesota, Wisconsin, North Dakota and South Dakota. It
will now use TiVo's whole-home and multi-screen suites to deliver
its services. TiVo solutions will also form the interface using
which Midcontinent's customers will get to view content through
linear cable television, video on demand and broadband.
According to the company, customers of South Dakota would be the
first ones to receive TiVo's services and products. Thereafter,
Midcontinent Communications plans to offer these services across
TiVo has been focusing on partnerships and strategic alliances
to drive subscriber growth. TiVo has a number of partnerships with
major companies including
), Charter Communications, RCN and Suddenlink. TiVo also expanded
its services globally through partnerships with ONO,
Virgin Media Inc.
) and Canal Digital (in Scandinavia).
In the first half of 2012, TiVo entered into a partnership with
Pace, a leading developer of technologies and services for the
broadcast and broadband industries. TiVo also signed an agreement
with Sweden's largest cable operator Com Hem. Furthermore, TiVo
extended its partnership with Ono, Spain's largest cable
We believe that TiVo will continue to pursue opportunities for
developing strategic partnerships with cable operators both in the
domestic as well as international markets in order to boost its
subscriber base going forward. We believe that these partnerships
will also help in reducing competition over the long term.
However, pending patent litigation issues, rising subscription
acquisition costs and higher research and development expenses are
expected to impact TiVo's profitability over the next few
Thus, we have a Neutral recommendation on TiVo over the long
term (6-12 months). Currently, TiVo has a Zacks #3 Rank, which
implies a Hold rating for the short term (1-3 months).
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