Xperi completes spin-off, eyes TiVo OS, connected car ambitions

Xperi leadership on Monday celebrated its official spin-off into a product-focused business, including the TiVo OS, ringing the New York Stock Exchange opening bell as it re-listed as an independent public company.

Xperi previously disclosed plans to separate its IP licensing buseiness to solely focus on its products business, with the latter now trading under the ticker XPER. Xperi encompasses the media platform businesses including entertainment technology brands TiVo, DTS, IMAX Enhanced, and HD Radio.

Xperi Chief Products and Services Officer Geir Skaaden chatted with Fierce Video about the company’s strategy as it focuses on products in the connected TV and connected car space – two categories where he sees overlap and opportunity to complement, building on platforms and leveraging the company’s existing scale.

First up is the TiVo OS for smart TVs, which is positioned as a content-agnostic independent media platform. It already scored its first smart TV OEM customer in Europe’s Vestel, with the first TiVo-powered TVs expected to start shipping in the first half of 2023. Vestel manufactures TV sets under brands including Toshiba, JVC, Polaroid, Panasonic and others.

Xperi doesn’t have TVs to ship yet, but Skaaden said feedback has been rewarding as it showcased demos of the look and feel of the product, noting there’s “been a lot of positive response” in what it means for the end user in terms of surfacing content from different sources.

“I think people are recognizing that this is something that’s different, especially among TV OEMs and partners” who want to participate in what’s expected to be strong media growth and connected TV monetization opportunities in the future, he said. “We provide a platform where they can brand the experience, retain customer ownership, and participate in the long-term economics in a different way than some of the big tech walled gardens are offering today.”

Some of the major players are Roku, Google, Amazon, and Samsung, among others – with Comcast also entering the smart TV arena relatively recently.

As Parks Associates senior analyst Paul Erickson pointed out, the balance of power for advertising and measurement on smart TVs has shifted towards the platform owners, where they’re in a position to collect consumption behavior data and serve targeted ads, providing a data-driven revenue stream via consumers’ most-adopted video device.

“The companies controlling the smart TV platforms in use today are thus in control of the most significant point of entertainment aggregation in the home, and one that that they can also leverage as a significant source of long-term recurring revenue via the value of the data collected,” wrote Erickson.

TiVo OS provides ‘super aggregation’

The impartial approach to content is a key part of Xperi’s smart TV operating system strategy, where it’s all about delivering a content-first experience for search and discovery, no matter the source.

There are a number of players vying for a space in the smart TV OS category, but Skaaden suggested TiVo OS is different than most other platforms that have some level of economic interest in their own content, and therefore incentive to push people to certain channels or app ecosystems.

He emphasized TiVo OS can break down silos from different content sources to show users the entertainment that interests them most, regardless of service or platform. And as most users today have interest in watching content across different platforms, he noted, it can pull from linear traditional TV, broadcast, or streaming apps, in a way that’s personalized. For example, programming from the growing menu of content platforms is blended into a traditional carousel that gives the user a profile tailored to them or their household.

Ultimately, this tends to drive higher engagement, and shortens the time (or number of clicks) it takes for users to land on a TV show, movie or piece of content they want – something Xperi’s seen through the current households it services through video operators.

“It shortens the time [to find content] more than 60% by approaching it this way,” Skaaden said.

Recent data from Hub Entertainment highlighted the wide array of services consumers use to find content and their appetite for aggregation. A May survey showed 69% said it takes eight or more entertainment services to meet their TV lineup needs “very well,” while 91% of respondents in a July survey by Hub said access to multiple services via a single device improves the viewing experience.   

 When it comes to a tailored user experience, Xperi already has a full metadata personalization engine through the 30 million households it services today via broadband and cable operators. Every quarter TiVo gets over 16 bilion queries from users looking for content.

“That gives us incredible insights into understanding patterns and trends, but also personalizing that to the end user by time of day, the context of what’s on at that time and the patterns from that particular household,” he noted.

Coupling that with the ability to search content across platforms also helps drive meaningful improvements in engagement.

In tests with the TiVo streaming stick, he said the company found it can drive 1.7 to 1.8-times the engagement level in viewership versus traditional streaming sticks that potentially offer up the same programming.  

“By being an unbiased neutral platform, we have the ability to kind of super aggregate content across silos,” Skaaden added.

The product will first come to market in Europe but Xperi “is definitely seeing interest for all markets,” he said. The company itself is most focused on markets with strong advertising demand such as Western Europe and North America.

Complementary connected car ambitions

With ambitions in the connected TV space, Xperi also sees room for its independent media platform to touch multiple markets and play a similar role in the car.

Skaaden noted there’s increased attention in the auto industry on in-cabin comfort, entertainment and safety. Xperi already owns HD Radio, which is an open free digital standard for radio in cars in the U.S. and gives reach of over 90 million cars as an install base. And radio still represents 70% of media consumption in cars, he added.

“We see that as a foundational element that we can build upon with the platform we’re talking about around TV, in adding other elements,” he said. Similar to the unbiased search for video in the home, Xperi believes it can do the same with radio as the foundation in the car, making it easier to find things to listen to across podcasts, radio and streaming audio and music – and down the line, incorporate video.

“In that sense, it’s the same platform and same scale plays to our advantage in the car, but the form factor of the content is slightly different, founded in radio and audio,” Skaaden said. “But as we see that evolve we also see video have a key role in the car in the future” which is something automakers are looking to accelerate.

While technical implementation of the connected car and connected TV efforts will be worked on in parallel, the timeline for the auto market is a bit further out. Skaaden anticipates video in cars to come to market in new form factors in a 2025-2026-type window.

He expects to see larger video screens in the backs of cars, as well as dashboards with fairly large horizontal displays in the front (similar to some models on the market today).

“Certain segments of that will have the ability to show video, as we think about streaming video in the home, but on a fixed display in the car” with some restrictions around safety, he noted. Xperi also does image sensing inside vehicles, which provides insights about who and what’s happening in the cabin. It’s something Skaaden sees as converging with the entertainment experience, allowing for further personalization.  

And now that Xperi has completed the spin-out, Skaaden said it’s able to operate with much greater focus and attention to the categories where the company feels it can make the most impact, building on the platform it has into areas with expected growth – such as CTV and auto – and leveraging its existing scale.

“When you think about things like smart TVs and cars, the platform is the same, the content may be slightly different, but most of it is very similar, so we get a lot of scale benefits from doing that,” he said, adding that the products simply reflect different end points. “The infrastructure to service that growth is already in place.”