Rovi returning to its main mission in entertainment technology

Rovi returning to its main mission in entertainment technology
Rovi's technology can be found in set-top boxes, TV sets and other gadgets. "We are the agnostic provider that tells you where and when you can enjoy entertainment," says Peter Halt, Rovi's finance chief. (Francine Orr / Los Angeles Times)

Click through a TV guide on the television or look up a movie online, and there's a good chance that the information you see was made possible by Rovi Corp.

The Santa Clara, Calif., company has a hefty trove of more than 5,000 current or pending patents that cover a wide span of entertainment technology.


Those include patents that help users navigate and find content on TV and give recommendations on what to watch.

The company also has databases of in-depth information on movies, TV shows, music and books. The technology enables viewers to find movies in which a particular actor has appeared, for example, or a television show's theme music.

Rovi's technology can be found in set-top boxes, television sets and other electronic gadgets.

Founded in 1983 as Macrovision Corp., the company devised a technology that embedded copyright protection on video. The first video encoded by the company was the 1984 crime drama "The Cotton Club," set in a 1930s Harlem jazz club.

The company changed its name to Rovi in 2009.

"We don't have a name consumers recognize," said Peter Halt, the company's chief financial officer. "We are the agnostic provider that tells you where and when you can enjoy entertainment."

About half of Rovi's business comes from licensing its patents to such service providers and electronics firms as Time Warner Cable Inc. and Panasonic Corp. The other half comes from products such as databases and entertainment guides.

The latest

In February, Rovi acquired Veveo Inc., which provides search and recommendation technology. Two months later, the company sold its DivX and MainConcept businesses for as much as $75 million.

Those steps were part of an effort to shed businesses outside Rovi's core business and bring its focus back to search and guidance technology for entertainment, Halt said. Essentially, the core business helps people find what they want to watch, read or hear.

Rovi strayed from that main mission after the 2011 acquisition of Sonic Solutions, which delivered TV shows and movies on demand.

"Two years ago, we were a company playing in multiple sectors that were tangentially related," Halt said. "We made a decision to streamline the business."


Rovi has created technology that has gone into such hardware and software as digital video recorders, parental controls and electronic TV guides.


The company also was an early investor in gathering huge chunks of data about films, movies and other content. Sometimes Rovi creates its own content; other times it collects and sorts content from third parties.

"So clicking a movie, you can find out the director and the music that's in it," Halt said. "We provide data that is legal and legit. It is curated and cleaned up."


Analysts said Rovi's litigious history has sometimes detracted from its products and patents.

The company has sued a string of companies, including Netflix Inc. and Hulu, for allegedly using its patents without permission. Some — such as LG Electronics — have settled with Rovi.

The company lost a legal spat with Inc. in April after accusing the online retailer of infringing on two of its patents. Rovi has vowed to keep fighting against Amazon's use of other patents.

For a while, litigation "seemed to take more of a priority than their business model," said James Goss, a managing director at Barrington Research.

Halt said Rovi does not like to sue. "Our preference is to find a reasonable, commercial agreement," he said. "This happens 99% of the time."

With its restructuring in recent years, Rovi still has a ways to go to clarify its business to investors and industry watchers alike.

"One of the overhangs we had on stocks in the last couple of years is the inability to articulate what we do," Halt said. "It was really difficult for investors to understand. It was difficult for employees to have an elevator pitch to explain what they do."

Analyst views

Five analysts recommended buying Rovi stock, nine suggested holding it and one said it's time to sell.

"It does seem like they are meeting a lot of the challenges that have been laid out," said Goss, who suggests holding the stock.