Rovi, Google Sign License Agreement2 Aug, 2012 By: Chris Tribbey, Erik Gruenwedel
Google will use Rovi technology in the rollout of Google Fiber
Rovi Corp. signed a multiyear licensing agreement with Google, providing a license under Rovi's interactive program guide patent portfolio for set-top boxes, as well as online and mobile platforms.
Google intends to use the agreement in the beta rollout of Google Fiber, a fiber-optic broadband distribution network being tested in Kansas City.
“Our agreement with Google continues the growth and relevance of our patent licensing program for not only traditional platforms, but also new media experiences across multiple screens,” said Samir Armaly, EVP, worldwide intellectual property & licensing with Rovi.
Ralph Schackart, analyst with William Blair & Co. in Chicago, said that with fiber service slated only in the Kansas City market, the incremental revenue Rovi initially expects to receive from the agreement will be minimal, given that Google will likely not have a huge installed base overnight.
“In our view, Google’s decision to license Rovi’s IP, especially for the OTT/mobile and online environment, provides incremental validation of the strength of Rovi’s intellectual property,” Schackart wrote in an Aug. 2 note.
The analyst said Google’s decision to begin licensing Rovi’s IP for its new pay-TV fiber service is a minor positive to IP licenses to Rovi, which he estimates will generate Rovi about $0.30 per household/month, not including mobile and online. Schackart said it is more an indication that Google has recognized the value of Rovi’s IP in an OTT environment.
Rovi recently lowered its fiscal 2012 revenue outlook by roughly $100 million; about half, or $50 million, was related to license revenue Rovi expects to start receiving in 2012 from OTT providers such as Hulu, Netflix and Amazon VOD.
Rovi reports quarterly results later today.