TiVo's Triplets

Make it a threesome. On Thursday, WPP Group (Nasdaq: WPPGY  ) joinedInterpublic (Nasdaq: IPG  ) and Omnicom Group (NYSE: OMC  ) in buying advertising space from TiVo (Nasdaq: TIVO  ) on behalf of its clients.

Financials details weren't disclosed, but it's a good bet that TiVo stands to make millions from the arrangement. Advertising, after all, is a multibillion-dollar industry, and some of the world's largest firms have cast their lot with TiVo, including Sony (NYSE: SNE  ) , General Motors (NYSE: GM  ) , and Kraft Foods (NYSE: KFT  ) .

But this deal is less about revenue and more about obtaining a competitive advantage. Seriously, do you think it will be long before French ad firm PublicisGroupe (NYSE: PUB  ) decides it, too, must be able to access TiVo for its clients?

If not, then what's the alternative? Answer: There isn't one. TiVo boasts a fat patent portfolio that includes protection for advertising on a DVR. With EchoStar (Nasdaq: DISH  ) already on the business end of a losing legal tussle, I doubt many others will rise to challenge the DVR pioneer in the courts.

Frankly, my biggest fear with TiVo has nothing to do with copycats or the courts. Nope, my biggest fear is Nielsen, which in November plans to roll out new boxes for rating ads. They'll also be able to track ad viewership for prerecorded shows, which, in turn, will provide the first real data on the so-called "TiVo effect," which has been blamed for a prolonged malaise in TV advertising.

If Nielsen's data reduces the "TiVo effect" to myth, look out -- the business and the stock could fall apart quickly. But I don't expect that to occur. Advertisers, after all, have ways of finding out what works, with or without the aid of technology. If three of the biggest ad firms are willing to spend millions to hedge their bets, as they have with TiVo, you'd better believe TiVo has developed something worth worrying about. Better stay tuned.

Pause for related Foolishness:

TiVo is a Motley Fool Stock Advisor selection. Ask for us anall-access pass, and you'll get a backstage look at all of the stocks that are helping David and Tom Gardner beat the S&P 500 by more than 41% as of this writing. It's free for 30 days.

Fool contributorTim Beyersstill thinks TiVo is the best thing ever to happen to TV. Tim owns shares of Interpublic. Find a complete list of his holdings by checking Tim's Foolprofile. Kraft is aMotley Fool Income Investorpick. The Motley Fool has an ironcladdisclosure policy.

Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 534619, ~/Articles/ArticleHandler.aspx, 10/22/2016 11:51:48 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 1 day ago Sponsored by:
DOW 18,145.71 -16.64 -0.09%
S&P 500 2,141.16 -0.18 -0.01%
NASD 5,257.40 15.57 0.30%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/21/2016 4:00 PM
TIVO $19.90 Down -0.10 -0.50%
TiVo CAPS Rating: **
DISH $57.40 Down -1.78 -3.01%
DISH Network CAPS Rating: **
GM $32.04 Up +0.29 +0.91%
General Motors CAPS Rating: ***
OMC $79.75 Up +0.12 +0.15%
Omnicom Group CAPS Rating: *****
SNE $32.11 Down -0.61 -1.86%
Sony CAPS Rating: ***
WPPGY $107.13 Down -0.57 -0.53%
WPP Group CAPS Rating: No stars