Fast-Forward Thinking

How legal helped TiVo succeed in an increasingly saturated market

In September 2015, TiVo, the California-based interactive television company, introduced a functionally similar product to one that its biggest competitor rolled out almost fourteen years prior. The feature, known as SkipMode in TiVo’s new Bolt Unified Entertainment System, allows users to skip entire commercial breaks in their recorded shows with the touch of a button.

In 2001, when the company was in a heated battle with ReplayTV for market share, the companies took two vastly different approaches. The aggressive ReplayTV jumped at the tantalizing chance to build commercial skipping into its set-top boxes. TiVo—knowing the move would draw the ire of advertisers and regulators—opted for a less antagonistic approach by allowing users to fast forward through commercials and allowing a user-initiated “back-door” approach to skip commercials. Users could voluntarily enter a code into a TiVo remote and then choose to skip ahead thirty seconds—but TiVo chose not to advertise, offer, or promote that functionality.

So why did TiVo wait nearly fifteen years to debut SkipMode?

In late 2001, three top television networks sued ReplayTV’s parent company, SONICblue for violating federal and state laws. The companies alleged ReplayTV’s “Commercial Advance” and “Send Show” technologies allowed viewers to skip commercials and forward premium content to other users. SONICblue filed for bankruptcy in 2003.

Matthew Zinn is TiVo’s senior vice president, general counsel, secretary, and chief privacy officer. He moved to San Jose in 2000 after starting his career in Washington, DC with internships at National Public Radio and the Federal Communications Commission. After graduating from the George Washington University National Law Center, he worked for several boutique communications law firms and then several large cable operators.

Since joining TiVo as the company’s first lawyer, he’s worked to build TiVo’s legal department and steer the company through high-profile acquisitions, high-stakes patent litigations, and heated regulatory battles against giant, well-funded adversaries, including the National Cable Television Association and the Motion Picture Association of America. Through it all, he’s maintained one clear goal for the product side of the company’s business: to ensure that TiVo has opportunities expand, innovate, introduce disruptive products while avoiding litigation.

That chance to help steer a media company with disruptive technology is what first attracted Zinn to TiVo after AT&T Broadband acquired his previous company. “I wanted to find a company that was taking advantage of digitization to change paradigms of how people interact with media, and TiVo was a perfect fit,” he says.

In Zinn’s early days at the company, his major legal challenge was to protect the company during a period of great innovation. Although Zinn had no previous experience as general counsel, he had “cable DNA” and understood both the media landscape and the mindset of industry executives. “Our closest competitor got sued out of existence because they didn’t understand the media industry, and that caused them to make a series of unwise moves,” he says. You don’t want to pick a big fight without having the financial resources to see it through, and ReplayTV lacked those resources. Instead of unnecessarily antagonizing major players—who TiVo would later need as key partners—Zinn advised his executives to pursue an incremental approach to introducing disruptive functionality. Over the years, Zinn helped TiVo cross many “lines in the sand” put forth by big media companies.

Fifteen years later, things have changed. The once feared DVR is prevalent. Users, broadcasters, and advertisers have embraced—or at least accepted—commercial skipping as a reality. DISH Network fought and won a legal battle to establish that commercial skipping is not a copyright violation. DISH, however—being subject to programmer agreements—had to scale back its commercial skipping functionality. TiVo is not subject to such agreements. In 2015, with the legal precedent set, TiVo successfully launched SkipMode without attracting a lawsuit. Unlike previous incarnations of commercial skipping technology, SkipMode requires user volition each time a user chooses to skip an entire commercial break. Zinn refers to it as “fast-forwarding perfected.”

Our closest competitor got sued out of existence because they didn’t understand the media industry, and that caused them to make a series of unwise moves.

Zinn and his team have managed major patent litigations against leading companies like AT&T, Verizon, DISH, Motorola/Google, Cisco, and Microsoft. After numerous trips to the Court of Appeals over seven years, DISH agreed in 2011 to pay TiVo a total of $600 million for using the company’s protected intellectual property. TiVo has reaped over $1.6 billion in total judgments and settlements from all these litigation matters, providing the company additional runway to continue developing innovative products.

As the world of TV continues to evolve, TiVo is adapting. “People know TiVo as a consumer brand, but our retail sales have been relatively flat for several years,” Zinn says. “Our growth has been in providing service and technology to small- to midsized US cable operators and large international operators in countries such as Spain, Sweden, and the UK.” With the recent acquisition of Cubiware, a Warsaw-based technology provider, TiVo has broadened its product line to enable operators in emerging markets to use scaled-down versions of TiVo that meet the lower revenue and price sensitivities of those markets.

Zinn helps manage global legal affairs, financial transactions, and corporate matters, and he is responsible for the human resources and corporate communications functions of the company.

Further, Zinn handles complex privacy issues. Since its inception, TiVo has gathered user data to provide anonymous viewing recommendations. And because of that, Zinn became one of the corporate world’s first ever chief privacy officers. In that role, he has testified before Congressional committees, numerous conferences, and successfully led the company through an FTC inquiry into its privacy practices ultimately satisfying the regulator that TiVo adheres to the promises made in its privacy policy. Even though TiVo isn’t covered by the Cable Communications Privacy Act of 1984 as cable and satellite companies are, it still adopted the law’s framework to avoid disclosure of personal viewing information without consent. “Everything we’ve done with data has always been aggregated, anonymous, or de-identified and privacy protected, and those policies have carried us through well and put us in a position where we can expand internationally and continue our history of innovation,” Zinn says.

In 2012, Zinn helped TiVo negotiate and complete the purchase of The Right Audience for a reported $20 million. The Right Audience helps advertisers analyze viewer information and combine that data with other information like grocery shopping data to determine how to make more intelligent and efficient television advertising decisions. The largest audience doesn’t necessarily correlate to the best audience for a particular product. TiVo worked with The Right Audience before it bought the company, and TiVo still only supplies The Right Audience with anonymous or deidentified viewing information.

In April 2016, TiVo announced its acquisition by Rovi Corporation in a $1.1 billion deal designed to extend the global reach of the combined companies to serving nearly 500 service providers and adding more than 10 million TiVo-served households to Rovi’s current base of approximately 18 million households using Rovi guides worldwide. The combined company will retain the TiVo name, carrying TiVo’s brand—and brand promises—forward into a competitive future.