• by Thom Forbes  @tforbes, March 25, 2016

TiVo, a company whose name was on the verge of becoming a Xerox-like verb when its DVR devices introduced us to time-shifting and the 30-second skip in the early aughts, is in advanced merger talks with Rovi, a lesser-known but bigger software company that helps viewers navigate the digital entertainmentscape, TheNew York Timesreports.

TiVo and Rovi would merge with owners of the former probably owning about 30% of the combined company, sources tell Leslie Picker, and having some cash in their pockets as well. Activist investor Glenn W. Welling of Engaged Capital, who “won two seats on the board of Rovi last year” has “pressed it to seek a merger with TiVo,” Picker reports. Neither company has commented on the report. 

San Jose-Calif-based TiVo closed up 23.4% for the day; San Carlos, Calif.-based Rovi fell 1.3%. “Up to Wednesday's close, TiVo's shares had fallen 28.6% in the past 12 months, while Rovi's had fallen nearly 9%,” Reuters’ Yashaswini Swamynathan reports.

“If consummated, the deal would bring together TiVo — which has shifted its business to selling software and hardware to pay-TV operators, away from retail sales of DVRs — with Rovi, a supplier of interactive program guides, entertainment metadata and related products to cable and satellite operators, consumer-electronics makers, media and entertainment firms, and Internet companies,” writes Todd Spangler for Variety.

“Rovi was formed after Macrovision acquired Gemstar, which made interactive program guides that help consumers navigate shows on television, and renamed the company in 2009,” Picker writes. “Those guides, which are used by about 18 million TV subscribers worldwide, made up slightly less than half of Rovi’s $526 million in revenue last year; the rest was derived from licensing intellectual property. “

Rovi’s G-Guide, for instance, gives viewers “advanced programming functionality to easily search and connect to their favorite entertainment,” according to a release Tuesday announcing that it will be bundled with Sharp’s Aquos TVs available later this month in Japan.

The interest the two companies have in each other “appears to be primarily about patents,” The Verge’s Jacob Kastrenakes tells us. “While TiVo and Rovi both make real products that real people actually use, neither of them make most of their money that way.” TiVo’s Time Warp patent, “which covers fast-forwarding through TV, is particularly notable,” he adds, but there are about 6,000 issued and pending patents between the two companies.

Both TiVo and Rovi “have a history of filing lawsuits fueled by their respective pools of patents and intellectual property,” reports Jeff Baumgartner for Multichannel News. “Of recent note, TiVo fired a lawsuit at Samsung claiming that the CE giant was infringing on four patents that have been litigated previously. TiVo has since settled lawsuits against Motorola Mobility (formerly part of Google) and Cisco Systems, as well as Time Warner Cable, Dish Network, AT&T and Verizon Communications.”

“The deal makes sense to us,” Jeffries analysts Brian Fitzgerald, Brian Pitz and Timothy O’Shea wrote in a research note cited by Variety’s Spangler, adding they “would not be surprised if other suitors emerged.”

Tom Rogers, who was TiVo CEO for 11 years, announced in November that he would step down from that role but continue as non-executive chairman. Longtime TiVo CFO Naveen Chopra was named interim CEO in January.

“TiVo, perhaps the greatest force in popularizing DVRs to record TV and skip its ads, has been aiming to focus on Internet-based media services as well as expansion overseas to reignite growth,” writesThe Wrap’s Joan E. Solsman, quoting a recent Rogers comment about the company’s need “to chart a new path.” 

“Meanwhile, U.S. regulators have proposed loosening cable companies’ grip on television set-top boxes, which could bolster TiVo as an alternative choice for pay-TV customers,” she points out. 

Separately, the shares of music-streaming service Pandora Media’s surged 10% yesterday on speculation that it might be looking for a deal itself after announcing Wednesday that “longtime media industry veteran” Anthony J. Vinciquerra, currently a senior adviser to private-equity firm TPG, has joined its board, as Tomi Kilgore reports for MarketWatch.

“If I were selling Pandora, I would add a director like Mr. Vinciquerra to the board,” Albert Fried & Co. analyst Rich Tullo wrote in a note to clients cited by Kilgore. “If I were buying Pandora, I would send Mr. Vinciquerra to Pandora to aid in integration. Just speculation.”

Ah, speculation. A human activity that predates binge-watching, time-shifting and music-streaming and will no doubt outlive them as entertaining time-killers.