TiVo Takes Out $50 Million Marker - Don’t Worry It’s From Citigroup Not Tony Soprano
January 26th, 2007 Davis
The Yankee Group may be predicting that TiVo won’t be around in 2010, but apparently, Citigroup doesn’t share the same dismal outlook. According to an 8K filing made this afternoon, TiVo announced that they’ve negotiated a new $50 million revolving line of credit with the bank. The line of credit will remain in effect until TiVo terminates the arrangement, violates the covenants or January 25th, 2010, whichever one comes first.
In the filing, TiVo indicated that they have the option of going back and requesting an additional $50 million be added to the line of credit if they needed it, but for the time being, they have no plans to borrow any of the money from the new loan. The line of credit replaces a $15 million loan with the Silicon Valley Bank that expired last September.
The terms and conditions on the loan impose standard debt restrictions in how TiVo can operate their business, but two notable features of the loan are the restrictions that could prevent TiVo from entering into certain M&A negotiations and the formula used for the interest rate calculation.
TiVo already has a poison pill in place, that all but ensures the company won’t be bought out in a hostile takeover scenario. To add to this, they also have language in both their Comcast and Cox agreements, that allow either company to terminate their cable deals, if TiVo is acquired by another company. While the inclusion of this type of language isn’t unusual for a loan of this nature, it existence is further proof that TiVo isn’t interested in selling the company, unless it’s on their terms.
In regards to the interest rate calculations on the loan, the revolving line will have a floating interest rate of 4% + the 1 month LIBOR. With the 1 month LIBOR currently at 5.32%, this would imply a borrowing cost of 9.32%, if TiVo does end up accessing the line of credit it would need to be for working capital needs. If TiVo ends up defaulting on the loan, then immedietely the interest rate would jump up 2%, but would then remain fixed. Borrowing wouldn’t be cheap, but it’s nice knowing the gun is loaded, in case you ever need it.
With $78 million in cash and another $28 million in short term investments, I somehow doubt that TiVo will ever make heavy use on this line of credit, but it’s mere existence should help to reassure nervous shareholders. I think that a lot of the doom and gloom on TiVo has been overdone, but with most of the analysts pretty dour on TiVo’s prospects, access to another $50 million in cash should help to soothe investors who have been concerned about TiVo’s near term ability to survive. Previously, Citigroup had helped TiVo to raise $65 million in a secondary stock offering and the extension of their line of credit serves as a indication of their committment to helping TiVo succeed.
In a separate 8K filing, TiVo also announced the addition of Jeffrey Hinson to their Board of Directors. Hinson had previously worked as the CFO of Univision, but resigned a little more than a year and a half ago to “pursue other interests in Dallas where he and his family reside.” TiVo is of course, located a little far from Dallas, but given the amount of time the company is spending on their patent dispute with Echostar, Texas is probably beginning to feel like a second home to the company.
Hinson will become the 9th member to TiVo’s board and should serve as an excellent complement given his background in Hispanic media. With TiVo having recently announced a cable partnership with Cablevision S.A. de C.V, he is certain to play a role in acquiring Spanish TiVoCast content and in advising the company on it’s Latin American growth plans. In addition to serving on TiVo’s board, Hinson also severs on the board of telecommunications company, Windstream Corp.
Posted in Disclosure - I own stock in co. mentioned, TiVo | 2 Comments »
Davis Freeberg’s Site Of The Week
January 26th, 2007 Davis
Compete Graph Hosted on ZooomrThis week’s winner of the site of the week contest is compete.com. On the surface, Compete is a just another search engine on the web. They use Yahoo! to power their search results and while their interface looks a lot cleaner than the Yahoo! home page, when it comes to search technology, there really isn’t anything all that special about the results. If Compete was just a search engine, it would be just another average site on the net, but what makes Compete truly special is their site snapshot feature that allows you to look at an analysis of traffic that different websites get.
In many ways, Compete is very similar to Alexa, but on steroids. Instead of just tracking how one site ranks compare to others, they break down their data to a level where you can see an estimate of the number of unique visitors to a site, the amount of time that web users are spending at a page and the number of repeat visitors to a site. Like Alexa, Compete relies on statistical sampling to come up with their estimates, but unlike Alexa, they utilize a more diversified sample pool for there statistics.
This means that their snapshot tends to be more accurate then the stats you see on Alexa, but like Alexa, there are still a few shortcomings. If your site doesn’t get a lot of traffic, than their sample pool may not have enough data to get an accurate picture of what your traffic looks like.
It also means that if an abnormal number of people in their sample group who visit a site more then then the rest of the population, it can distort the traffic stats as well. I’ve been watching the site for about three months now and for the most part the traffic numbers look like they are accurate, but I have noticed a few anomalies. For example, if you take a look at the traffic estimates for Digg, it seems to show that Digg is receiving approximately 10 million unique visitors per month, but if you look at the traffic estimates from last October, it reports that the site was only getting a couple million unique visitors each month. Last year, Digg claimed that their internal numbers suggested that they were getting about 20 million unique visitors per month, so I’m not really sure how to look at Compete’s data, but at the very minimum it’s fascinating to look at, even if it isn’t always 100% accurate.
Perhaps even more remarkable then the public data on Compete’s site, is some of the private statistics that the company is tracking as well. Last week, Matt Pace wrote a fascinating analysis on Blockbuster and Netflix’s traffic and it turned up some interesting facts about both companies.
In the report, he was not only able to accurately predict the number of new subscribers that Netflix picked up during the quarter, but was also able to show that 58% of Blockbuster’s traffic is being driven by subscribers accessing their site from laptops that Blockbuster has put into their store locations. This is fascinating data indeed and shows that Blockbuster’s total access may be expanding the size of the online DVD market, by giving subscribers who do not have internet access, a way to still subscribe to the service. While I disagree with some of the conclusions made in Matt’s analysis, I still felt that it was one of the best articles on Netflix vs. Blockbuster, that I’ve read in a very long time.
Congratulations to Compete.com on winning this week’s site of the week contest. I’m looking forward to watching the site, as the service continues to develop. If you would like to nominate your own site for the site of the week contest, feel free to email me at Davis (AT) DavisFreeberg.com for consideration. In the meantime, here are the nominations for next week’s site of the week.
Posted in Site Of The Week, Disclosure - I own stock in co. mentioned, Netflix | 2 Comments »
TiVo Owners Show Off Their Beautiful Series 3’s
January 22nd, 2007 Davis
As a digital enthusiast I love home theater systems, but as a TiVo fan boy my head almost exploded when I saw that the TiVo Community Forum was keeping a list of photographs featuring TiVo Series 3 home theater set-ups. So far there are 5 pages of photos and from looking at the list, I’m more than a little envious of a few of these. Not surprisingly, there are a lot of HDTVs and in just about every photo you can see some kind of kick ass sound system, even a few Xbox 360’s show up.
What I found the most interesting though, was that despite all of us starting with the same basic home theater ingredients, there are really so many unique ways you can set it up. Everything from how far you keep your TV from the wall to the brands you end up buying have an impact on what your personal theater experience feels like. Being able to look into other people’s homes made me wonder why some people choose flat screens and why others choose rear projector TVs.
With so many different ways to tweak and customize your home theater line up, do the choices we make in how we arrange our digital furniture somehow say something about our personalities? I’m not really sure, but seeing how unique each theater system was, made me think about some of my own home theater choices. In retrospect, I wish I could go back and make some decisions differently, but there will always be new technologies emerging and more choices to consider in the future.
Posted in TV, Disclosure - I own stock in co. mentioned, TiVo | No Comments »
DVR Porn
January 22nd, 2007 Davis
I’m not really sure whether to classify this as NSFW or not, but it did make me feel a little weird watching it.
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First HD-DVD, Now Blu-Ray - Hackers Set HDTV Free
January 22nd, 2007 Davis
It didn’t take long for the hackers to figure out how to get around the new copy protections on the HD-DVD discs and now it turns out that, it didn’t take much longer, to crack Blu-Ray either.
Given how paranoid the studios have been about letting HD content online, I’ve got to imagine that there are more then a few media execs, a little upset right now. Blu-Ray and HD-DVD was supposed to feature the best copy protection that Hollywood has to offer, but like all DRM, it melted against the collaborative intelligence of the web.
I hate the fact that the studios use piracy as a red herring for why we can’t control our content. They pretend that piracy is why we can’t use TiVo HD to go or why they won’t license more films online, but the truth is that they just really want to sell more fat margin DVDs. Their content is already available online because their own copy protections have failed. Instead of hiding behind shallow excuses, they should embrace the digital revolution and offer consumers a way to pay for the content that they can already get for free. The studio fat cats can complain about how much piracy is hurting their business all they want, but it’s hard for me to be very sympathetic when they won’t offer the content online, even for a fee.
Posted in HDTV DVDs, DRM, Disclosure - I own stock in co. mentioned, TiVo | No Comments »
Davis Freeberg’s Site Of The Week
January 19th, 2007 Davis
This week’s winner of the site of the week contest is the television graveyard known as Jump The Shark. The site is dedicated to uncovering television shows that are currently (or have been previously) locked into the downward spiral of mediocrity. It’s name came from an episode of Happy Days, where the Fonz tried to jump over a shark with his motorcycle. In retrospect, this was the point where Happy Days lost it’s hip cool factor and started it slide into second rate TV. The site can be pretty brutal and it’s no fun seeing some of my favorite shows getting skewered, but it also offers some pretty entertaining commentary on pop culture and there are a lot of shows that do deserve to be on their list.
Some of my more favorite features on the site include, the ability to vote for the worst television show ever, a list of TV characters that have been played by more then one actor, and it’s list of shows that never ended up jumping the shark. Jon Hein, who runs the site for TV Guide, also has a blog that he updates semi-regularly.
Congratulations to Jump the Shark on winning with this week’s site of the week contest. You can see the nominations for next week’s site of the week below and can vote in the sidebar. If you have any sites that you’d like to nominate for site of the week, feel free to email them to me at Davis < @> DavisFreeberg Dot Com.
Yesterland
Dave’s Daily
Compete.com
Posted in Site Of The Week | No Comments »
Bittersweet Symphony
January 18th, 2007 Davis
Video: The Verve Bittersweet Symphony
Posted in VOD | No Comments »
Netflix Offers Tips To Unlock Hidden Content On Your DVDs
January 18th, 2007 Davis
I’m not sure how I found this, but I was clicking away like crazy on the internet today and somehow I ended up at a page where Netflix is keeping a list of DVDs that contain hidden Easter eggs on over 50 films. I had no idea that DVDs even used Easter eggs to begin with, let alone that they were this many popular titles that included the hidden content. Looking over the list, I was a little disappointed to see that I’ve rented many of these films already, but didn’t know that the hidden content was there.
Some of the eggs sound pretty interesting. You can unlock a one minute animated clip buried on the Hair DVD or you can activate the panic button on the Chicken run DVD, that lets you get the chickens all riled up. The one I’d like to see the most though, is the hidden horror movie on the Sixth Sense DVD, that was shot by it’s Director when he was only 11 years old. 
Making use of bonus content is one of the things I like about DVDs. I used to never check out the commentary or extra clips that they included, but over the last year I’ve started taking advantage of these features more and have found that I really enjoy most of the extra content that they include. Secretly, I was hoping to see the Mystery Science Theater guys reunite to do the commentary for Snakes on a Plane, but sadly it never happened. In the meantime though, I’m still hoping that Mike Nelson will release a RiffTrax for the film, because it would be a fun film to see mocked.
Posted in Movies, DVDs, Disclosure - I own stock in co. mentioned, Netflix | No Comments »