TiVo 2013 Annual Report Download - page 29
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Table of Contents
were we to change our critical accounting estimates, including the timing of recognition of revenue from our product lifetime subscriptions,
our results of operations could be significantly impacted.
We have provided and expect to continue to provide the TiVo service in jurisdictions outside of the United States, such as the United
Kingdom, Spain, Sweden, Mexico, Canada, Taiwan, Australia, and New Zealand. However, we have limited experience in international
operations. There are risks inherent in doing business internationally, including privacy regulations that vary from country to country, global
financial market turmoil, economic volatility and the global economic slowdown, currency exchange rate fluctuations and inflationary
pressures, the requirements of local laws and customs relating to the distribution of content and the display and sale of advertising, import or
export restrictions and changes in trade regulations, difficulties in developing, staffing and managing foreign operations, issues related to
occupational safety and adherence to diverse local labor laws and regulations, and potentially adverse tax developments. In addition, we face
significant competition and technological challenges in competing with other consumer electronics manufacturers in these jurisdictions and
in complying with international laws and technological standards such the various digital over-the-air standards like DVB-T. If we are unable
to properly manage our international operations or comply with international laws, regulations, and requirements, we could suffer damage to
our reputation, brand, and revenues and as a result our business would be harmed. We have partnered, and expect to continue to partner,
with local broadcasters, cable television operators, and satellite providers to provide the TiVo service internationally. Transactions with
international partners may never materialize or may not result in significant revenue for us and may result in significant costs.
Although we have not been the subject of such actions to date, a past competitor's DVRs were the subject of several copyright infringement
lawsuits by a number of major entertainment companies, including the major television networks. These lawsuits alleged that the
competitor's DVRs violate copyright laws by allowing users to skip commercials, delete recordings only when instructed and use the Internet
to send recorded materials to other users. TiVo-enabled DVRs have some similar features, including the ability to fast-forward through
commercials, the ability to delete recordings only when instructed and the ability to transfer recordings from a TiVo-enabled DVR to a
personal computer and/or portable media devices via TiVoToGo transfers. Based on market or consumer pressures, we may decide in the
future to add additional features that may be objectionable to entertainment companies. If similar actions are filed against us based on current
or future features of our DVRs, entertainment companies may seek injunctions to prevent us from including these features and/or damages.
Such litigation can be costly and may divert the efforts of our management. Furthermore, if we were ordered to remove features from our
DVRs, we may experience increased difficulty in marketing the TiVo service and related TiVo-enabled DVRs and may suffer reduced
revenues as a result.
Entertainment companies, networks, or video distributors may claim that our advertising products or features may unintentionally violate
copyright or trademark laws, or otherwise unfairly compete with them, by being placed within, adjacent to, or on top of, existing video
programming or advertising. Entertainment companies or video distributors may seek injunctions to prevent us from offering these products
or features, seek damages and/or take other measures, such as blocking, stripping or refusing carriage to prevent us from selling or
distributing our advertising products. If we were unable to sell or distribute our advertising products or features on our DVRs, we may suffer
reduced revenues as a result.
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