TiVo 2015 Annual Report Download - page 7

Table of Contents
internally developed innovation is also enhanced by patents acquired from other industry participants. While we historically have licensed our portfolio for
use with linear broadcast television, the industry transition to internet platform technologies is enabling new video services for television inside and
outside the home on a broad array of media consumption devices. We believe this transition presents new opportunities for us to expand the industries we
serve and license additional patent rights, which are essential and/or useful as enablers of advanced media devices and services.
Pursue Strategic Transactions. We plan to expand our technology portfolio, improve our capabilities and extend or grow our businesses by
pursuing licensing arrangements, joint ventures, and strategic acquisitions of companies whose business, technologies or proprietary rights complement
our operational and strategic goals.
Intellectual Property Licensing
Our Intellectual Property Licensing segment generated
54% , 53% and 55% of our revenue for the years ended December 31, 2015, 2014 and 2013 ,
respectively.
Our patent portfolio provides the foundation for our Intellectual Property Licensing segment and includes over 5,400 issued and pending
patents. Through ongoing investment, targeted acquisitions and strategic portfolio management, our patent portfolio has continued to grow in size and
relevance. We generate substantially all of our Intellectual Property Licensing revenue from our discovery patent portfolio, which represents approximately
78% of our total patents. Over the last 10 years, our U.S. discovery patent portfolio has more than doubled in size and the number of issued U.S. discovery
patents has more than tripled in size. The scope and relevance of our discovery patent portfolio has also grown over this period as IPG functionality has
increased. An IPG is an interactive listing of television or video program information that enables viewers to navigate through, sort, select and schedule
video programming for viewing and recording. We believe that interactive video guidance technology is a necessary tool for television viewers facing an
increasing amount of available content and an increasing number of digital cable and satellite television channels, VOD services, and internet
- enabled
services. The IPG is evolving from a guide for linear television content, to a guide for all the digital content to which consumers have access to in and out of
the home across the multiple devices they use. Our discovery patent portfolio includes important intellectual property coverage and protection for key
features and functionality across guidance, search and recommendation, DVR, VOD, OTT, second screen offerings and various interactive television
applications. Our discovery portfolio's patents have expiration dates that range from 2016 to 2034. Our ongoing innovation efforts are intended to ensure
that our patent portfolio continues to provide long
- term protection across these key areas of discovery well beyond our existing portfolio.
Licensing Across Multiple Segments. Traditional pay TV service providers generally pay us a monthly per subscriber fee and have historically
licensed our discovery patent portfolio for the television use case. As TVE initiatives have become more prevalent with service providers, we are entering
into extended secondary licensing agreements with our service provider customers to provide coverage and rights for the TVE use case. Service providers
in the online and OTT space generally pay us a flat fee to license our patents for a specified time period. Our CE licensees generally pay us license fees
based on the number of units produced or shipped that utilize our patents, for specified products, in defined territories. Our agreements with the major CE
manufacturers generally allow them to ship an unlimited number of units utilizing our discovery patents, provided they pay us an annual fixed fee. We
generally do not receive a license fee from CE manufacturers for set
- top boxes deployed by a cable or satellite provider where that provider has also
licensed our discovery portfolio. Service providers and CE manufacturers who have a patent license from us are not required to provide advertising in their
IPG. However, our agreements with domestic service providers generally require the sharing of advertising revenue if IPG advertising is integrated.
Our service provider intellectual property licensees include Alphabet Inc. ("Alphabet", formerly Google Inc.), AT&T Inc. (including DIRECTV),
Cablevision Systems Corporation ("Cablevision"), Canal+, Comcast Corporation (“Comcast”
), Cox Communications Inc. ("Cox"), EchoStar Corporation
("EchoStar"), Foxtel, Hulu, Sky Italia, Sky plc (formerly British Sky Broadcasting Group plc), Time Warner Cable Inc. ("Time Warner Cable"), UPC, Vudu and
others. We also have license agreements with third party IPG providers such as ARRIS International plc ("ARRIS", formerly ARRIS Group, Inc.) and others.
As of December 31, 2015 , 166 million pay TV subscribers worldwide are estimated to be receiving a licensed IPG, including 84 million internationally. Our CE
intellectual property licensees include companies such as LG Electronics Inc., Panasonic, Samsung and Sony Corporation ("Sony").
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