TiVo Takes Aim At Roku

Xperi has unveiled a major update to its TiVo OS, adding generative AI discovery and reducing the operating system's footprint to 1GB of RAM and 4GB of storage. This update, announced at the IFA trade show on September 3, could potentially allow Xperi to take share from Roku without owning the TV screen.

The updated TiVo OS includes a forthcoming Agent TiVo feature for natural-language discovery, making it easier for users to search for content. The reduced operating system footprint is also expected to lower television manufacturers' component costs, potentially making it a more attractive option for companies looking to license the software.

Xperi's strategy is to position itself as a neutral, independent software layer, allowing manufacturers to maintain control over the home screen. This approach could appeal to manufacturers that do not want to surrender the home screen to an advertising platform like Roku. Additionally, the Agent TiVo feature could make it easier for users to search for content across fragmented streaming catalogs.

The company's success, however, depends on manufacturer adoption and consumer engagement. As of June 30, 23 hedge funds held XPER, up from 15 at March 31, indicating growing interest in the company. Clearline Capital reported 2,475,135 shares of XPER at June 30, after reducing its position during the quarter.

Roku, on the other hand, has a large installed audience and advertising data, giving it a significant advantage in the market. The company's ability to place discovery inside a platform that consumers already use and connect recommendations to subscriptions and ad inventory makes it a formidable competitor. As of Q2, 79 hedge funds held Roku, Inc. (NASDAQ:ROKU), up from 68 in Q1.

## Why it matters The update to TiVo OS and the addition of generative AI discovery could have significant implications for the streaming industry. If Xperi is able to gain traction with manufacturers and consumers, it could potentially challenge Roku's dominance in the market. However, the company's success is far from guaranteed, and it will need to demonstrate adoption, retention, and revenue from its new features in order to convince investors and manufacturers of its value.

The stakes are high, with the global streaming market expected to continue growing in the coming years. The ability to provide a seamless and intuitive user experience will be crucial for companies looking to gain a competitive edge. Xperi's updated TiVo OS and Agent TiVo feature are a step in the right direction, but the company will need to execute on its strategy in order to succeed.