TiVo soars further into the cloud, purchases cloud-based Digitalsmiths for $135 million

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TiVo’s business model has always included a keen focus on the development of its premium DVR boxes. But that may be about to change. After reportedly firing a large portion of its hardware staff last week, the company is delving even deeper into the cloud, announcing today it will be acquiring the cloud-based content delivery service, Digitalsmiths, for a reported $135 million.

In an official press release today, TiVo CEO Tom Rogers had this to say about the forthcoming deal,”The Digitalsmiths acquisition opens new opportunities to commercialize and deploy TiVo’s cloud-based services and technologies to operators, in an extremely cost effective way that can be offered either independently or in conjunction with TiVo’s renowned user interface.”

Rogers went on to say that he expects the Digitalsmiths acquisition to help TiVo expand its role even further with Tier-one U.S. service providers, and also boost the company’s earnings for the coming fiscal year.

Digitalsmiths is best known for its intuitive content search optimization software, led by its Seamless Discovery service. The service is designed to adapt to a user’s preferences in real-time, finding the relevant shows and movies users want to watch next without requiring arduous searching through multiple applications.

Digitalsmiths casts a wide net, powering 7 out of the top 10 pay-TV services, and helping to drive content search across multiple platforms, including Roku, Xbox, Playstation, iOS and Android devices, and other set-top boxes. With the acquisition of Digitalsmiths, TiVo not only hopes to build out its cloud-based services, but it also expects to forge closer ties with pay-TV content providers, helping to bring its services to a wider array of users.

All of this seems to be a part of a bigger strategy by TiVo to move out of body, so to speak, breaking away from its proprietary DVR devices, and expanding its special brand of content delivery and recording into the plethora of other devices consumers already own. While TiVo’s VP of Corporate Communications Steve Wymer firmly denied the company will be cutting out the hardware side of its business altogether in a recent interview with The Verge, the company’s latest moves seem to point to a much broader business strategy. 

As content delivery systems like set-top boxes, consoles, DVRS, and SmartTVs are expanding at a seemingly exponential rate, the battle for supremacy over viewers’ preferred interface has become an all out dogfight. It seems TiVo has seen the writing on the wall, and is looking for new ways to deploy its services beyond its signature boxes. We’ll have to wait and see if this new trajectory will pay off, but for now, it looks like TiVo is moving with nimble feet, and facing the ever-shifting paradigm of content delivery with eyes wide open.