The real settlement is a far more reasonable outcome. It’s comparable to the $500 million TiVo collected from DISH Network Corp (NASDAQ:DISH) two years ago, and about twice the size of the $250 million settlement over Verizon Communications Inc. (NYSE:VZ)‘s FiOS service, with its far lower customer count. This is the right ballpark for what the patent settlements should be worth, and sets another correct precedent for the not-terribly high value of technology and business method patents. It’s not the right way to get rich. I don’t want to own a patent troll, and TiVo just stepped away from that horribly incorrect path.
It also frees up TiVo’s resources to focus on what does matter, which is to rebuild the company in a more sustainable model. TiVo is already moving from making digital video recorder boxes to developing and licensing turn-key software and services for the digital millennium. The company has already scored royalty-bearing deals with several major cable and satellite companies. Getting the messy court cases out of the way and settled in full public view sets the stage for more productive deal-making discussions with holdouts.
The 15 minutes (or years) of DVR fame may soon be over, but the company has a plan for the next stage. The new TiVo wants to be the genius that ties today’s fragmented entertainment experience together, giving consumers a simple way to find their favorite content no matter what hosting service it may come from. It’s the media hub or clearinghouse to sit in between cable stations, Hulu, YouTube, HBO, and Netflix.
Oh, and TiVo also doubled the size of its share buyback program to $200 million, leaving more than $160 million of unused authorizations to exploit in the face of suddenly cheap share prices. That’s enough to soak up about 11% of TiVo’s float at post-drop prices, assuming that shares don’t bounce back when investors and analysts digest the news properly.
The article TiVo Records the End of Two Courtroom Dramas. Time to Buy, or Time to Panic? originally appeared on Fool.com.
Fool contributor Anders Bylund owns shares of Netflix, TiVo and Google, but he holds no other position in any company mentioned. Check out Anders’ bio and holdings or follow him on Twitter and Google+.The Motley Fool owns shares of Cisco Systems, Netflix, and Google. Motley Fool newsletter services recommend Netflix and Google. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.
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