During a routine inspection of MobiTV’s bankruptcy documents in early March, Faultline decided to compile a shortlist of sorts on companies best suited as buyers of the crumbling mobile TV software company.
Amino Technologies was top of that list, while TiVo parent company Xperi featured not far behind in the running. Our instincts were right on the money, as Amino submitted a $13 million bid for MobiTV assets this week, before being eclipsed days later by an $18.5 million bid at auction from TiVo for the ailing video technology vendor.
As of writing, TiVo has been confirmed as the outright winner to acquire the assets and – crucially for Xperi – the patents of MobiTV. However, we understand that a hearing is scheduled for 21 May at the US Bankruptcy Court for the District of Delaware to request approval of all aspects of the sale to the winning bidder. Roku and patent company RTX were also in the running, submitting a joint bid, but this fell short of what Xperi is prepared to front for MobiTV.
In the meantime, our detective work was based on MobiTV’s debt mountain, including an unsecured claim of $75,000 owed to Amino. While trivial in the grand scheme of MobiTV’s financial capitulation (reporting $79 million in liabilities), which has triggered clients to raise $15.5 million for emergency restructuring, we saw this relatively minor debt as an opportunity for Amino to haggle down the price of MobiTV’s assets.
Bidders have only shown interest in the “going concern” assets of MobiTV, meaning any business that is able to make enough money to avoid bankruptcy. TiVo’s bid of $18.5 million – for assets that as March were valued at $19 million – looks like a decent deal for MobiTV on paper.
The method behind voting Amino as a better suiter over say Ateme, Elemental and Xperi – to which MobiTV owes much larger sums in unpaid bells – is because not long ago the two vendors offered a joint product merging the MobiTV Connect app-based TV platform with the Amino OS Enable software, to upgrade legacy set tops with next-gen features.
Amino’s recent experience with MobiTV therefore places the company in a stronger position to drive the app-based business, although that is a market in which TiVo is also intent on making in-roads. TiVo’s business – like MobiTV’s – is centered on snapping up smaller operators of the cable and telco variety, also making it a good fit.
The joint effort has also given the Amino team a different taste of the US market – one that has proven irresistible. Amino isn’t short of contracts on the other side of the pond, having recently celebrated a milestone of reaching 14 North American deployments for Android TV Operator Tier technology since January 2020.
What MobiTV brings to the table for its new parent company is a TVaaS infrastructure business well-versed in upgrading video delivery from traditional QAM to IP and blending on-demand, live TV, catch-up TV, network DVR and recommendations. Its portfolio includes white label pay TV app development, a multi-tenant headend with IP video transport rights, and experience with multiple streaming platforms including Amazon Fire TV, Android TV, Roku, Apple’s tvOS, plus iOS and Android mobile devices. This offers compelling options for both TiVo and Amino as they seek to diversify their portfolios – as both gradually deprioritize hardware.
TiVo should be under no illusions about the extent of work required, although we aren’t confident that the company will provide the significant investments required over the next 6 to 12 months.
Of course, we are under no illusions that Xperi’s eyes are focused on anything other than MobiTV’s patent portfolio, which is quite extensive – spanning 16 pages on the website Justia Patents. Some of the latest patents assigned to MobiTV include a feedback loop content recommendation, an intermediate key frame selection and animation mechanism, a content server media streaming management system, a character-based method of search and discovery of media content, and a method for dynamic digital object placement in video streams. All music to Xperi’s ears.
An immediate issue for TiVo, as the new MobiTV owner, will be shaking up the pay-as-you-go model that has wreaked havoc on the vendor’s TVaaS business. Having no minimum subscriber requirements in the contract small print has been one of the biggest weaknesses in the MobiTV model.
In other words, MobiTV has struggled to make any money from sweeping up tiny tier 3 cable TV contracts, of which it has numerous, as represented by the National Cable TV Cooperative. While MobiTV found fame at US cable and mobile operators, namely T-Mobile, its inability to attract deals outside of the US pay TV market – or possibly its reluctance to pursue overseas revenues – has evidently been a contributing factor in the company’s fall from grace.
There is no need to stop gathering low hanging fruit, the next owner just needs to be savvier about how this fruit is harvested.
That said, new deals haven’t completely dried up for MobiTV, winning a deal at US pay TV operator Cable One in the early days of 2021, to develop an all-IP video offering called Sparklight TV. This was seen as a possible precursor to Cable One phasing out its legacy TiVo-based platform, which we reckon is a major factor in TiVo submitting a bid – to ensure it retains the Cable One contract.
A few months earlier, in October 2020, MobiTV landed a deal at MCTV, another US operator, serving Ohio and West Virginia. It deployed the MobiTV Connect technology to power the new MCTV Stream applications on smart TVs, mobile devices, and other streaming devices.
For Amino, it will have to seek alternative ways of reaching its target of $250 million in annual revenues by 2025, with a long way to go from the $82.7 million recorded in 2020.