TiVo-a-Go-Go

If you thought last year's My Tivo Gets Me ads were only a plea for couch potatoes, think again. The DVR pioneer seems successful in making sure that analysts get it, too.

Friedman Billings Ramsey upgraded its rating on TiVo (Nasdaq: TIVO) from "underperform" to "market perform" this week, sending shares 7% higher in yesterday's trading.

The firm feels that Dish Network (Nasdaq: DISH) will be itching to settle with TiVo when the two companies meet later this month.

Their legal tussle involves Dish's supposed infringements on TiVo's patented Time Warp digital video recorder technology, a basic time-shifting feature in DVRs. Dish Network has been defeated in every ruling on the issue, but it's been reluctant to pay up.

Facing the real threat that its DVR satellite receivers could become costly paperweights, Dish Network will eventually have to get serious about playing nice with TiVo. Beyond tens of millions in infringement damages, TiVo may also be able to parlay a settlement into an additionally lucrative licensing deal.

Cable provider Comcast (Nasdaq: CMCSA) and satellite television rival DirecTV (NYSE: DTV) are already on board with Tivo-licensing deals. This is all part of TiVo's plan to transform the patent-rich company into a collector of high-margin royalties.

The metamorphosis would certainly come as a relief to investors who endured the weak financials TiVo posted during its days of subsidizing hardware purchases to grow its company-owned base of users. The company's income statements are now improving -- at the expense of slower growth.

It's easy to cheer on a settlement that will solidify TiVo's pioneering role. When you couple that with digital delivery deals to serve up movies from Amazon.com (Nasdaq: AMZN) and music from RealNetworks (Nasdaq: RNWK), it's safe to say that TiVo isn't ignoring its 1.75 million subscribers in the pursuit of broader licensing nets beyond its set-top-box world.    

If even bearish analysts are starting to warm to TiVo, perhaps a double-digit share price will finally become a reality.

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