Cogeco Drops IPTV Project, Goes With TiVo

Canadian MSO Cogeco revealed in its third quarter earnings report that it has scotched a plan to roll out an alternative IPTV solution, and will instead move forward on a deal with TiVo.

Cogeco said its indirect cable subsidiary, Cogeco Cable Canada, was hit with an impairment of C$32.2 million tied to an IPTV project that encountered “performance issues” and has since been abandoned.

“Subsequently, in order to enhance its competitiveness, the Cogeco Cable Canada subsidiary has concluded a partnership with TiVo Inc.,” the company said, noting that the MSO expects to deploy a TiVo-based multiscreen solution in the first half of its 2015 fiscal year. Based on its current financial reporting structure, Cogeco would be expected to start rollouts before March 2015.

Cogeco and TiVo certainly aren’t strangers. Atlantic Broadband, a Cogeco Cable subsidiary that serves about 227,000 video subs in the U.S., began to roll out a TiVo-powered service last fall.

Cogeco represents a sizable North American win and a first with a Canadian-based MVPD for TiVo, which ended the first quarter of 2014 with about 4.5 million subscribers, with 3.58 million of them coming way of its partnerships with MVPDs.

Cogeco lost 9,620 video subs in its fiscal third quarter, reducing its total to 1.03 million (227,160 in the U.S., and 807,831 in Canada).

Cogeco posted third quarter revenues of $496.44 million, up 6.9% versus the year-ago quarter. Net profit dropped to C$35.5 million, from C$48.1 million, due in part to the impairment tied to the aforementioned failed IPTV project.

For fiscal 2015, Cogeco’s cable unit expects to generate revenues of C$2.03 billion, representing growth of C$75 million, or 3.8%, compared to revised guidance of C$1.95 billion for full fiscal 2014.

“Excluding the impact of the impairment related to the prior attempt at developing an alternate IPTV video platform, we expect to meet our fiscal 2014 guidance"  Cogeco president and CEO  Louis Audet said, in a statement.