TiVo (Nasdaq: TIVO), the television solutions provider, once again came out with a quarterly net loss. However, the company managed to reverse the decline in subscribers by simply focusing more on distribution tie-ups with cable TV companies rather than on retail sales. Let's take a closer look at TiVo's game-changing moves.

Figuring it out
 The company's revenue increased by 27% to $64.8 million, of which service and technology revenue grew by 25% to $51.8 million. Regrettably, TiVo stayed in the red with a sequentially wider net loss of $24.5 million. So what has TiVo been doing to remedy this?

Is there light at the end of the tunnel?
 During the third quarter, TiVo finally managed to end four years of declining subscriptions by adding a net 117,000 subscribers, bringing its total count to 2 million. This was made possible by the addition of 220,000 customers by Virgin Media (Nasdaq: VMED). And after the introduction of TiVo, Virgin Media has happily seen a significant improvement in customer satisfaction.

The company has also recently deployed its products with Grande Communications, Spain's largest cable operator, and also expects Charter Communications (Nasdaq: CHTR) to follow suit. Furthermore, TiVo's integration with Comcast (Nasdaq: CMCSA) is still in the trial stage and DIRECTTV (Nasdaq: DTV) is expected to launch the TiVo in the first half of December 2011.

TiVo's strategic deals with operators would give the company a reach of more than 10 million homes. And according to TiVo, it has only begun to scratch the surface of what could be a huge opportunity.

Why, you may ask? This is because TiVo sits in a sweet spot as one of the very few companies that builds cost-effective and advanced TV solutions that many pay TV operators would gladly use.

Pay TV operators are increasingly using TiVo because the company provides fast solutions that help the end consumer. And that in turn helps to stem the subscription decline these operators have been facing of late. Therefore, the tie-ups are a win-win situation. But everything's not going great for TiVo.

TiVo, AT&T, and Microsoft duke it out
 TiVo also has its share of detractors in the form of AT&T (NYSE: T) and Microsoft (Nasdaq: MSFT). To put it simply, once upon a time, TiVo sued AT&T with an allegation that its Internet, TV, and telephone service package called U-verse infringed upon three patents for recording. So Microsoft sued TiVo, stating that the patents in question infringed upon Microsoft's Mediaroom technologies. This in turn has translated into a mountain of litigation costs for TiVo. The company said it would incur even higher expenses because of these lawsuits in the coming fourth quarter as a significant amount of activity is expected in December and January. Ouch! Not exactly a good thing for a company that's been in the red for quite some time.

The Foolish bottom line
 Could the tie-ups with pay-TV operators herald the beginning of a turnaround? It may well be so. But until TiVo starts showing some green in its bottom line, I'll be watching from the sidelines. To stay updated on TiVo's progress, don't forget to add it to your very own watchlist. It's free and lets you stay up to speed on the latest news and analysis for your favorite companies. Simply click here to get started.