TiVo, Verizon Lawsuit: Verizon to Pay $250 in Settlement
The lawsuit between TiVo and Verizon has come to a close.
TiVo Inc will receive at least $250.4 million from Verizon Communications Inc as part of a patent litigation settlement, the video recording company stated on Monday.
TiVo has established itself as the video recording pioneer, but the company has had to use legal action in order to generate needed revenue from licensing fees as it struggles to fight competition from low-cost rivals.
Analysts have stated the Verizon settlement could show that there could be aTiVo victory in cases against other companies such as Time Warner Cable Inc and Motorola Mobility, now owned by Google Inc.
The settlement follows a similar deal it reached in January with AT&T Inc where they agreed to pay $215 million to TiVo.
"Verizon has set a strong precedent for Motorola to settle," Brean Murray research analyst Todd Mitchell said in regards to the recent cases.
Time Warner Cable declined to comment on Monday and Motorola Mobility was not immediately available for comment.
TiVo said Verizon would initially pay $100 million in cash and recurring quarterly payments totaling $150.4 million through July 2018. Verizon will also pay TiVo license fees on a monthly basis until July 2018 for every Verizon DVR subscriber that's above a certain agreed-upon number.
So what will be the effect on consumers? The companies are in talks to have TiVo boxes carry the new Internet video streaming service Verizon is developing with Coinstar Inc's Redbox to take on Netflix Inc. TiVo's DVRs already feature video services provided by Netflix and Amazon.com Inc.
The companies also agreed to dismiss all pending litigation between them.
The lawsuit sent TiVo's shares up more than 4 percent to $9.96 in morning trading, while Verizon was down 0.3 percent at $45.52.
