TiVo will acquire Digitalsmiths, a provider of network-based browse, search and recommendation systems for video services. TiVo will pay $135 million in cash for the company. The pioneer of personal video recorders aims to accelerate its evolution to a cloud-based software platform.
Digitalsmiths has relationships with 7 of the top 10 pay-television operators in the United States, which between them serve 64% of pay-television households in the country. It says its technology is licenced to providers that serve more than 100 million households worldwide.
The company has been growing rapidly since it launched its Seamless Discovery service that adapts to the viewing preferences of users in real-time, according to context. It is deployed on multiple platforms, including Apple iOS, Android, Roku, Xbox, PlayStation, Kindle and various set-top boxes.
TiVo chief executive Tom Rogers said the acquisition would open up opportunities to offer cloud-based services to operators, either in conjunction with the TiVo user interface or independently.
“Digitalsmiths contributes expertise, data opportunities, and approaches that complement and extend TiVo’s extensive work in advanced television to customers seeking search, recommendations, and portability,” he said.
Ben Weinberger, the co-founder and chief executive of Digitalsmiths, said both companies shared a view on the importance of cloud-based services to provide the next generation of personalized video discovery experiences.
Matt Berry, co-founder and chief operating and technology officer of Digitalsmiths, said joining forces with TiVo would enable the delivery of solutions that would improve customer satisfaction and provide better usage metrics for video services.
Founded in 2006, Digitalsmiths is a privately-held company backed by venture capital. Its investors include Cisco and Technicolor.
TiVo is aiming to reinvent itself with a sustainable business model. The company was a pioneer of the personal video recorder but cable and satellite companies soon offered subscribers similar products.
TiVo won a series of settlements that have provided substantial payouts. It has since been working with operators like Virgin Media in the United Kingdom, ONO in Spain, and Com Hem in Sweden.
Over time, TiVo aims to move many of its services into the network cloud. It is using some of its current cash reserves to accelerate this evolution through the acquisition of Digitalsmiths.