# Newsweek asks: "Is TiVo's Time Up?"



## SparkleMotion (Feb 2, 2004)

More doom & gloom. From http://www.msnbc.msn.com/id/11768175/site/newsweek/?GT1=7850

*Is TiVo's Time Up? 
The DVR pioneer faces competitive assaults on all fronts. Cisco's acquisition of Scientific Atlanta sure didn't help.*

Newsweek

March 20, 2006 issue - The biggest loser in Cisco's acquisition of Scientific Atlanta is a little company that's well loved by its customers: TiVo. The Silicon Valley pioneer helped invent the digital video recorder (DVR), and its name became synonymous with the technology's wondrous ability to pause and record live TV to a set-top box and to save us from TV ads. Cisco executives almost certainly considered acquiring TiVo as a way to break into digital entertainment (though they declined to comment on any potential deal). Cisco sizes up most companies in its field of vision, and John Chambers himself keeps three TiVos in his home, while Cisco senior VP Mike Volpi was a TiVo beta tester.

But as bigger companies like Scientific Atlanta and Motorola copied TiVo with their own generic DVRs and started shipping more units through the cable companies that buy their other equipment, Cisco found it easy to conclude which to acquire. "Market shares have shifted pretty dramatically away from TiVo," says Volpi. "TiVo was ahead of the market and now a lot of people have caught up."

These are grim times for TiVo. Nearly eight years since its revolutionary recorder went on sale, there are only 4 million boxes in consumer homesa quarter of the 16 million DVRs in use. (By comparison, the iPod went on sale in 2001, and Apple has since sold 42 million of the music players and owns most of the market.) Even worse, two thirds of all TiVos are inside the satellite systems of the News Corp.-owned DirecTV, which has terminated its TiVo deal in favor of a DVR made by another News Corp. subsidiary. Not surprisingly, TiVo has had only a single profitable quarter in its history and most analysts are grumpy about its inability to get any of the major cable or satellite companies behind it.

Last summer TiVo replaced cofounder Mike Ramsay with a new CEO, Tom Rogers, an NBC veteran who disputes the pessimism over TiVo's future. Rogers thinks TiVo can attract new users and industry partners with cooler features that don't appear in the generic DVRs of companies like Scientific Atlanta. For example, he recently unveiled KidZonea tool that allows parents to use TiVo to browse through a list of acceptable programming for their children and then choose only what the parents want kids to watch. The rest of the TV is then locked down with a password. Rogers hopes KidZone is a "feature that will differentiate TiVo from generic DVRs."

TiVo has a few other tricks up its sleeve. Unlike the bare-bones DVRs, TiVo boxes allow users to transfer programming to laptops. And Rogers hints that soon TiVo will let users access more programming from the Internet, such as video blogs and the amateur movies that are now filling up sites like video.google.com, as opposed to from scheduled broadcasts. The plan is then to get the cable companies, with their own generic DVRs from Scientific Atlanta and Motorola, to offer a premium TiVo service to customers for an extra monthly fee. Already one cable giant, Comcast, has signed on and later this year will let its subscribers download the TiVo interface to the digital cable boxes already in their homes. TiVo must hope that its brand name and unique features are enough to attract those subscribers and change its fortunes.


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## MickeS (Dec 26, 2002)

SparkleMotion said:


> its name became synonymous with the technology's wondrous ability to pause and record live TV to a set-top box and to save us from TV ads


AAAAAAAAAAARGGGHHHH! There's the evidence that TiVos marketing department has completely and utterly failed. A feature that few actual TiVo owners use in comparison to other features has become the thing its synonymous with.

The rest of the article wasn't particularly interesting or enlightening. But correct, I guess. However, the iPod comparison is interesting. I actually SAW ads for iPods on TV. And the ad campaigns were extremely well done, and grabbed my attention, and built not just awareness of the brand, but a desire to actually get one. Let's discuss TiVos marketing campaigns: OK. That was easy.


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## jmoak (Jun 20, 2000)

This is just one of many we'll see in the next three or four weeks.

and the band played on.....


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## Atomike (Jun 12, 2005)

Tivo is doing everything it can to distinguish itself from cable DVRs? Tivo did have one big difference: product lifetime. This separated Tivo from the other players. Now there's very little difference at all - except the much higher monthly rates.

How long before someone posts Roger's picture under "incompetence" in Wikipedia?


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## jmoak (Jun 20, 2000)

There's very little difference between a tivo and a generic dvr?????

You're saying that lifetime service was the only difference there was???

Dude, come on now....


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## MickeS (Dec 26, 2002)

Atomike, I would say TiVo has a LOT of features that the cable DVRs don't have. It's just that nobody knows about them.

Like I've said many times before, I love those features and use them every day. But they don't seem to translate to more sold units. Who's to blame for that? I blame marketing.


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## dgh (Jul 24, 2000)

Atomike said:


> Tivo is doing everything it can to distinguish itself from cable DVRs? Tivo did have one big difference: product lifetime. This separated Tivo from the other players. Now there's very little difference at all - except the much higher monthly rates.


Well I think they're also the only uni-tuner player left in the cable market 

(For a while at least.)


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## ZeoTiVo (Jan 2, 2004)

a company has 25% of the market including DirectTV - those units are not taken from users homes BTW. TiVo just does not get any more revenue.

without DirectTV, TiVo has 8% (.25 *1/3) of the market based only on a single Tuner SD model that has to compete against dual tuner HD units.


sounds like they are in there swinging to me. Add in that by end of year they compete on the level playing filed of dual tuners and choice for integrated digital/HD or not depending on customer and I think no one can write the end chapter with any real knowledge yet.


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## MickeS (Dec 26, 2002)

The problem is that the entire market is still abysmally small. To continute the iPod comparison, they made the market grow with their iPods, they didn't just take a bite out of a (non-)existing market.

TiVo should by this point have managed to create not only a bigger market share, but a bigger market overall.


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## cheer (Nov 13, 2005)

Perhaps. Then again, Tivo still faces the same problem they've faced for some time now: how to convince people to pay extra for their service. Sure, _we_ all understand why Tivos are better, but it's one of those you-don't-get-it-until-you-see-it things for the most part.

Average TV viewers (meaning the kind that don't post on forums  ) don't know the difference and don't care. If my dad wanted a DVR, he'd just get the cable one since it's significantly cheaper.

--chris


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## MickeS (Dec 26, 2002)

cheer said:


> If my dad wanted a DVR, he'd just get the cable one since it's significantly cheaper.
> 
> --chris


Does he have digital cable? If not, it's not significantly cheaper than a TiVo (might even be more expensive). But it is probably significantly easier.


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## mike3775 (Jan 3, 2003)

If I were to get another DVR, I would get it from Comcast? Why? Because it will be cheaper than getting another Tivo.

And I showed my parents everything that Tivo can do when they asked about DVR's. When they asked how much the price was(without the lifetime option), they said ok and called Comcast to get a DVR. They don't need to transfer to PC or take it on the road, theyjust want to have something to watch when nothing is on and VOD is lacking. Thats it.

Tivo may have hurt themselves by getting rid of lifetime. Why should Tivo expect someone to get a Tivo and pay $13 a month, when they can get a DVR from cable for $5? Not everyone wants the HME features either. I rarely use them, and the only reason I do have my tivo hooked into my wireless is so that I can take the shows I recorded and store them on a couple 300 gig external hard drives to keep the tivo's from deleting programs I may want to watch.


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## btl-a4 (Dec 28, 2005)

ZeoTiVo said:


> without DirectTV, TiVo has 8% (.25 *1/3) of the market based only on a single Tuner SD model that has to compete against dual tuner HD units.


That would be one of the major problems. Why has it taken TiVo so long (still haven't released a dual tuner) to catch up to a market they were in from the beginning. How long has the series 2 been the "new" product from TiVo, three years or so? To carry on the Ipod analogy in the same three years apple has introduced 2nd and 3rd generation ipod's, ipod photo, ipod nano, ipod mini, ipod shuffle and ipod video. Not to mention the lack of an ad campaign. They decided to give them to radio announcers and the like and have word of mouth push the product. Most of the "innovation" introduced by tivo makes my replay friends laugh. They have had alot of those features for years. TiVo has a great product that they did a very poor job of marketing. They are starting to pick it up, hopefully not too late.


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## Rob Helmerichs (Oct 17, 2000)

The biggest problem with TiVo is that people who don't have it just don't get how superior it is. I have a DirecTiVo and a Time-Warner DVR for HD, and it's almost painful to use the TW DVR. I think if people knew how good TiVo really is, they'd be clamoring for their cable companies to cut a deal and get it.


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## btl-a4 (Dec 28, 2005)

mike3775 said:


> Why should Tivo expect someone to get a Tivo and pay $13 a month, when they can get a DVR from cable for $5?


Not quite accurate I have a DVR from Comcast and it runs 9.95 a month, if I want a second one it's 16.95 a month. Those are the HD models, but still if you want a DVR on 2 tv's the price starts getting competitive. And to me it would be worth the extra money to get TiVo over Cable DVR for the stability and better user interface. The HD Cable DVR I have sucks hard. Just last night I had to delete two shows while I was watching them because the recording kept pausing and losing sound. I switched over to my TiVo to watch in SD.

They have a good chance of increasing market share if they put together a good marketing campaign, and differentiate themselves from Cabelco DVR's with better interface and features. If they don't do this, they could very likely go the way of Replay.


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## MickeS (Dec 26, 2002)

btl-a4 said:


> That would be one of the major problems. Why has it taken TiVo so long (still haven't released a dual tuner) to catch up to a market they were in from the beginning.


The dual tuner problem has been discussed ad nauseum here. Short answer: not possible.



btl-a4 said:


> Most of the "innovation" introduced by tivo makes my replay friends laugh. They have had alot of those features for years.


OK, I would definitely not bring up ReplayTV as some sort of model for TiVo.  But I agree with you that there has not been enough ViSIBLE innovation, although there really has been LOTS of added features since the S2 was introduced. But they have not been adding revenue, it seems.


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## jmoak (Jun 20, 2000)

mike3775 said:


> Why should Tivo expect someone to get a Tivo and pay $13 a month, when they can get a DVR from cable for $5?


In my area we have a $6 per month charge for "dvr service" plus $6.75 per month for a sd dvr or $9.95 per month for a hd dvr.

$12.75 per month for a sd dvr
$16.70 per month for a hd dvr
not including the extra charge for digital cable.

Brighthouse cable (twc), central florida


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## ZeoTiVo (Jan 2, 2004)

MickeS said:


> The dual tuner problem has been discussed ad nauseum here. Short answer: not possible.
> 
> OK, I would definitely not bring up ReplayTV as some sort of model for TiVo.  But I agree with you that there has not been enough ViSIBLE innovation, although there really has been LOTS of added features since the S2 was introduced. But they have not been adding revenue, it seems.


yes - in a nutshell TiVo needed hardware costs to come down to offer dual tuners and cable card to offer dual tuners and HD ability.

so while waiting to get to a dual tuner box that could be reasonably priced
TiVo wnet down a dual path of making single tuenr hardware dirt cheap (hence the great value to customer of lifetime) and innovating in software that would not effect hardware costs.

now they are on the verge of dual tuners and HD options that will chnage the selling landscape - they can finally market directly against cable co DVRs 
so Lifetime goes away. Ethernet can be added in aswell and they can start in on premium software features such as download content

it is the begining for TiVo - only time will tell if it is the begining of the ned or a whole new begining Like Apple went through when Jobs came back and revitalized product lines.


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## dgh (Jul 24, 2000)

ZeoTiVo said:


> yes - in a nutshell TiVo needed hardware costs to come down to offer dual tuners and cable card to offer dual tuners and HD ability.


Or they just needed a deal with a cable company. This is something we realized in 1998 when we were designing one of these: everyone wanted a dual-tuner integrated box, and we didn't see a practical answer (due to dueling cable box IR more than anything else) so we figured a deal with cable companies and or established cable box makers was needed. However several meetings with those, convinced us that none of them had any desire to insert a third party who wanted the kind of control and profit margin that we desired. So we dropped it. I hoped TiVo had something up their sleeve but they didn't. Fortunately cablecard eventually came along.


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## whatsnew (Mar 21, 2006)

Many cable TV viewers really don't care about Tivo's hi-tech features. They just want to watch TV and occasionally record a show. Tivo costs too much for people who watch TV casually.


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## jfh3 (Apr 15, 2004)

btl-a4 said:


> They have a good chance of increasing market share if they put together a good marketing campaign, and differentiate themselves from Cabelco DVR's with better interface and features.


Sadly, Tivo has shown that they are incapable of doing this. Rogers indicated last summer that we'd see more education on what Tivo is for the target market.

Still haven't seen anything like that and certainly nothing that compares cost of ownership vs. renting from cable.

The only marketing campaign I'm aware of was the dismal attempt about a year back that just confused people and did nothing to explain what Tivo was, let alone how it is better than the cable offerings for the vast majority of people.


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## MickeS (Dec 26, 2002)

jmoak said:


> In my area we have a $6 per month charge for "dvr service" plus $6.75 per month for a sd dvr or $9.95 per month for a hd dvr.
> 
> $12.75 per month for a sd dvr
> $16.70 per month for a hd dvr
> ...


I don't get it, why are there separate charges for "service" and for the dvr? Can you get one but not the other? Maybe it's just so they can advertise the cost of the dvr as $6.75?


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## dgh (Jul 24, 2000)

MickeS said:


> I don't get it, why are there separate charges for "service" and for the dvr? Can you get one but not the other? Maybe it's just so they can advertise the cost of the dvr as $6.75?


I take it then that you prefer TiVo's new bundled pricing plans.


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## jmoak (Jun 20, 2000)

Why do they add 20 cents for a remote control?
Why do they charge an extra $9.95 additional PLUS the $6.75 for a second sd dvr (or $9.95 for hd)?

...and just what the heck is this mandatory "TIMEGuard" they charge $2.79 a month for and cannot explain to me?

Folks like to say "a cable dvr is cheaper". Maybe it is in yours. But it ain't in my neighborhood!!!


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## MickeS (Dec 26, 2002)

Well... if the cost to use the DVR is actually $12.75, then that's the price they should advertise. The new bundled TiVo plans cost the advertised monthly price, so yes, that is a better and more honest way to do it.

The only reason I was OK with them advertising service and hardware cost separately before was because there was the lifetime option. If a monthly fee had been required, I think TiVo too should have advertised that as the cost when they advertised the price of the DVR itself.


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## ZeoTiVo (Jan 2, 2004)

jfh3 said:


> Sadly, Tivo has shown that they are incapable of doing this. Rogers indicated last summer that we'd see more education on what Tivo is for the target market.
> 
> Still haven't seen anything like that and certainly nothing that compares cost of ownership vs. renting from cable.
> 
> The only marketing campaign I'm aware of was the dismal attempt about a year back that just confused people and did nothing to explain what Tivo was, let alone how it is better than the cable offerings for the vast majority of people.


well what campaign would they do right now - sure the cable DVR has dual tuners and HD - and we will soon so hows about you check out all our great features on the single tuner SD in the meantime. And ours is only slightly more righ tnow hhmmm...........

as to the poster who said the average cable user just wants to watch shows and sometimes record them - that was my wife before I juts went ahead and boght a TiVo even though she was sure it was just a gadget we did not need. She instigated getting the second TiVo once she saw we could record what we watch now and watch it far more conveniently then having to deal with live schedule.

and occaisonal watchers benefit a lot more than heavy viewers since heavy viewers are already at the TV anyway but light viewers maybe have a night they watch shows or else all has to stop at 9pm ecah night for my shows.
now they can watch the 4 or 5 shows when they want and not be chanined to the TV at all


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## MickeS (Dec 26, 2002)

So... does anyone know of a website where cable DVR costs (the real costs, not the advertised ) are listed, for various cities? I was under the impression, just because it's been repeated so often I guess, that cable DVRs where indeed cheaper than TiVo. But maybe it's all just a myth?

Would be nice to be able to send something like that to for example the writer of the article the OP posted, so that myth gets disspelled. If it is a myth.


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## dgh (Jul 24, 2000)

MickeS said:


> Well... if the cost to use the DVR is actually $12.75, then that's the price they should advertise. The new bundled TiVo plans cost the advertised monthly price, so yes, that is a better and more honest way to do it.


But we've established that in most cases they are also the most expensive, especially if you don't remember to call TiVo 3 years later.

I recently looked at alarms for my home. The vendors ranged from "free alarm" with a contracted monthly price to one who gave the price for each widget, the labor and optionally could monitor for me. The latter had the highest upfront cost but was lower overall in just 2 years. (And still falling after that.) "free alarm" was the most expensive in the long run. You just need to do the math because "simple" or "honest" if you prefer does not necessarily equate to "low". (I have a natural preference for itemized in general, but in my experience, the more itemized the price, the lower it also is - less room to pad??? )


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## MickeS (Dec 26, 2002)

ZeoTiVo said:


> as to the poster who said the average cable user just wants to watch shows and sometimes record them - that was my wife before I juts went ahead and boght a TiVo even though she was sure it was just a gadget we did not need. She instigated getting the second TiVo once she saw we could record what we watch now and watch it far more conveniently then having to deal with live schedule.
> 
> and occaisonal watchers benefit a lot more than heavy viewers since heavy viewers are already at the TV anyway but light viewers maybe have a night they watch shows or else all has to stop at 9pm ecah night for my shows.
> now they can watch the 4 or 5 shows when they want and not be chanined to the TV at all


That is so true, and something I believe TiVo has COMPLETELY missed - that those who watch less television would benefit just as much or more than those who watch a lot. Especially with a single tuner!

Just because someone watches only a few hours a week doesn't mean they want to miss the shows they follow. I'm a pretty good example of that.  And it certainly doesn't mean that they wouldn't pay for it.

There must be some angle there that a good marketer could have used...


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## dstoffa (Dec 14, 2005)

whatsnew said:


> Many cable TV viewers really don't care about Tivo's hi-tech features. They just want to watch TV and occasionally record a show. Tivo costs too much for people who watch TV casually.


Does a falling tree make noise if nobody is there to hear it?

The majority of users who WANT a DVR (aka - Not those posting in these forums) look at one thing - the bottom line. They want a device which will record their shows by name. They don't care about offloading shows. They don't care about in-home sharing. They just want to tell their device to record all episodes of "The Sopranos", and have it do that.

Given the above paragraph, the average user is going to say, "How much does this cost?" and are simply going to choose the one with the lower cost.

Stand-alone DVRs cannot compete. Tivo has gotten rid of "Lifetime" service, so the one reason for getting a stand-alone box is now gone. The average consumer is going to go for the cheaper model. End of story. Without having to lay out for the cost of a box, why would someone who is not a niche user go for a stand-alone box?

"Hmmm. I want a DVR to record some shows I am never home to watch because I work late. What should I buy? I can get my cable company to give me a box for $5 / $10 per month, or I can buy this Tivo thing, paying $17 / month."

I just don't see it. DNNA didn't see it either, and that is why they pulled the plug on production of new ReplayTV boxes. In their annual report, they admitted that stand-alone DVRs cannot compete with Content-Provider provided boxes. They backed out of the hardware business, and became a software (guide) business.

The average user doesn't care about all the great things stand-alone DVRs can do. They aren't gonna hack their boxes. They aren't concerned about DRM. They don't care about archiving their shows. And that's the problem. You want to say marketing can change that? Maybe. But I believe the ends wouldn't justify the means, and simply Tivo would not be able to rake in enough subscription commitments to make up for the cost of the advertising.

As Larry the Liquidator said, "You know, at one time there must've been dozens of companies making buggy whips. And I'll bet the last company around was the one that made the best goddamn buggy whip you ever saw. Now how would you have liked to have been a stockholder in that company? You invested in a business and this business is dead. Lets have the intelligence, lets have the DECENCY to sign the death certificate, collect the insurance, and invest in something with a future."

Stand-Alones aren't gonna cut it.


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## MickeS (Dec 26, 2002)

dgh said:


> But we've established that in most cases they are also the most expensive, especially if you don't remember to call TiVo 3 years later.


Unless you count the required Digital Cable fee...



> I recently looked at alarms for my home. The vendors ranged from "free alarm" with a contracted monthly price to one who gave the price for each widget, the labor and optionally could monitor for me. The latter had the highest upfront cost but was lower overall in just 2 years. (And still falling after that.) "free alarm" was the most expensive in the long run. You just need to do the math because "simple" or "honest" if you prefer does not necessarily equate to "low". (I have a natural preference for itemized in general, but in my experience, the more itemized the price, the lower it also is - less room to pad??? )


OK... ?  Not sure what that has to do with TiVo vs Cable, since they're both monthly now.


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## MickeS (Dec 26, 2002)

dstoffa said:


> Does a falling tree make noise if nobody is there to hear it?
> 
> The majority of users who WANT a DVR (aka - Not those posting in these forums) look at one thing - the bottom line. They want a device which will record their shows by name. They don't care about offloading shows. They don't care about in-home sharing. They just want to tell their device to record all episodes of "The Sopranos", and have it do that.
> 
> ...


You do know that this "average user" according to the statistics does not have digital cable (I believe something like only 20% of households have digital cable)? And thus would end up paying way more than $17/month if he/she wanted a DVR. TiVo should have been able to make an inroad there. But haven't.


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## dstoffa (Dec 14, 2005)

MickeS said:


> You do know that this "average user" according to the statistics does not have digital cable (I believe something like only 20% of households have digital cable)? And thus would end up paying way more than $17/month if he/she wanted a DVR. TiVo should have been able to make an inroad there. But haven't.


If they don't have digital cable because they have chosen NOT to pay for it, then they won't be getting any DVR. Their choice NOT to get digital cable is being one of economics. I bet for those people, a VCR works fine. You can't sell ice to an eskimo.

If they don't have digital cable because it's not available, that is a different issue. I'd put my money on the hypothesis that most DVR households have digital cable.


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## dgh (Jul 24, 2000)

MickeS said:


> OK... ?  Not sure what that has to do with TiVo vs Cable, since they're both monthly now.


You're free to ignore any info you wish, however TiVo hardware is available monthly or upfront.



MickeS said:


> Unless you count the required Digital Cable fee...


I'm talking about the different ways of buying TiVo hardware. Perhaps in the 8000 or so messages, you've missed the fact that there are now 3 monthly plans and one up front plan. Or did I miss the elimination of the upfront option in one of those messages?


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## MickeS (Dec 26, 2002)

dstoffa said:


> If they don't have digital cable because they have chosen NOT to pay for it, then they won't be getting any DVR. Their choice NOT to get digital cable is being one of economics. I bet for those people, a VCR works fine. You can't sell ice to an eskimo.


I don't have Digital Cable... and it's not because of the cost is too high, it's just because I don't watch it, so no need to have it. I would hate to have to go back to a VCR to record just because I don't have digital cable. 



> If they don't have digital cable because it's not available, that is a different issue. I'd put my money on the hypothesis that most DVR households have digital cable.


Well, that's what I'm saying - if currently most DVR households have digital cable, that's not where TiVo is gonna get new customers as long as Series 2 is competing with the cable DVRs. Hopefully Series 3 can change that.

I'm saying, with Series 2 they should have gone after the households that don't have digital cable. If you get even a couple of percent of them, that would probably translate to a doubling of the installed standalone TiVo customer base. 

I have no clue if Series 2 will still even be available after Series 3 is released.


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## MickeS (Dec 26, 2002)

dgh said:


> You're free to ignore any info you wish, however TiVo hardware is available monthly or upfront.


OK, bad choice of words. I should have said "ongoing fee", not monthly. But since the favorable vendor in your example sold the products without any service requirement, it no longer applies to TiVo or cable DVRs. If your point was to illustrate the benefits of the lifetime sub, I'm with you.


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## dstoffa (Dec 14, 2005)

MickeS said:


> I'm saying, go after the households that don't have digital cable. If you get even a couple of percent of them, that would probablt translate to a doubling of the installed standalone TiVo customer base.


Here is where the marketing gets tough. What households do not have digital cable? And where are they located? I think you will have a tough time trying to convince rural America that DVRs are the future.

"Why do I need to spend $17 per month on a fandangled Tivo when my VCR records Hee-Haw off the three channels I get just fine....."


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## dgh (Jul 24, 2000)

MickeS said:


> OK, bad choice of words. I should have said "ongoing fee", not monthly. But since the favorable vendor in your example sold the products without any service requirement, it no longer applies to TiVo or cable DVRs. If your point was to illustrate the benefits of the lifetime sub, I'm with you.


Not quite. No matter where I got it installed, there was monitoring to be paid for. However, in some cases it was bundled with the hardware cost and in some cases it wasn't and in at least one case, I could have it either way. The bundled cases turned out to be the highest in the long run. The one who offered either way happened to be the lowest. The bottom line is you have to run all the numbers regardless of how they present them because when you have a price involving hardware and service (and maybe installation) everyone breaks it down differently.


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## DrStrange (May 18, 2000)

btl-a4 said:


> Most of the "innovation" introduced by tivo makes my replay friends laugh. They have had alot of those features for years.


To-do list? Recording history? True recording priorities? Those and the many other Tivo features that make recording easy and reliable that ReplayTV never came close to matching are Tivo innovations that they've had for so long many Tivo owners have forgotten how innovative they were, and while Tivo _is_ adding the innovations ReplayTV introduced, ReplayTV never did (and now never will) catch up with the innovations Tivo has had from the beginning.

A DVRs first job is to record TV shows. Tivos innovation was a box that did that right. ReplayTV could never do that, so resorted to flashy (and often useless) "innovations" that sounded better on paper than in practice.

Besides...



btl-a4 said:


> If they don't do this, they could very likely go the way of Replay.


If ReplayTVs "innovations" were so groundbreaking and worthy of envy and emulation, why has ReplayTV gone the way of...well, ReplayTV? Three times no less?

It's a bit goofy to suggest that Tivos product should have been more like one that two companies folded trying to sell, and the third simply gave up selling.


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## MickeS (Dec 26, 2002)

dgh said:


> Not quite. No matter where I got it installed, there was monitoring to be paid for. However, in some cases it was bundled with the hardware cost and in some cases it wasn't and in at least one case, I could have it either way. The bundled cases turned out to be the highest in the long run. The one who offered either way happened to be the lowest. The bottom line is you have to run all the numbers regardless of how they present them because when you have a price involving hardware and service (and maybe installation) everyone breaks it down differently.


OK, I assumed it was the same type of alarm that I had, that could be used whether it was hooked up to a monitoring service or not. But I agree with your point.


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## MickeS (Dec 26, 2002)

dstoffa said:


> Here is where the marketing gets tough. What households do not have digital cable? And where are they located? I think you will have a tough time trying to convince rural America that DVRs are the future.
> 
> "Why do I need to spend $17 per month on a fandangled Tivo when my VCR records Hee-Haw off the three channels I get just fine....."


I think you have too many preconceived notions about us that don't have digital cable... the vast majority of households in the US do not have digital cable. Even of those that do have cable, only about 60% have digital cable.

We're not all hicks...


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## lajohn27 (Dec 29, 2003)

dstoffa said:


> "Why do I need to spend $17 per month on a fandangled Tivo when my VCR records Hee-Haw off the three channels I get just fine....."


I've been waiting for a "HeeHaw" reunion show..

Nothing so far.. But that wishlist is ready.. 

J


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## dgh (Jul 24, 2000)

MickeS said:


> OK, I assumed it was the same type of alarm that I had, that could be used whether it was hooked up to a monitoring service or not. But I agree with your point.


Well "it can be used" but then it's a bit like a TiVo with manual recordings (Kinda )


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## SullyND (Dec 30, 2004)

dstoffa said:


> Here is where the marketing gets tough. What households do not have digital cable? And where are they located? I think you will have a tough time trying to convince rural America that DVRs are the future.


I do not have Digital Cable. It's an option for me, but there is no additional programming which makes having to deal with a converter box worthwhile. Of the people whom I know who have cable, only two have digital (because they have premium channels). My TiVo subscription on the other hand is worth every penny it costs.


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## dstoffa (Dec 14, 2005)

lajohn27 said:


> I've been waiting for a "HeeHaw" reunion show..
> 
> Nothing so far.. But that wishlist is ready..
> 
> J


I think you can get a "Best of Hee-Haw" DVD set from Time-Life. I remember seeing Roy Clark with his half hour info-mercial for them......

Laugh-In was the better show.


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## lajohn27 (Dec 29, 2003)

Laugh-In was indeed a better show... that's for sure.


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## jmoak (Jun 20, 2000)

dstoffa said:


> I think you will have a tough time trying to convince rural America that DVRs are the future.
> 
> "Why do I need to spend $17 per month on a fandangled Tivo when my VCR records Hee-Haw off the three channels I get just fine....."


Why??? Dang, son. Does I gotta 'splain it 't ya?

'cuz when Mark Martin flings up 'round Jeff Gordon in the high bank, smacks the wall and rolls three or four times I get 't see it a dozen times and can still zip up to the green flag an' not miss a dang thing! That's why!!!

Nascar on that tivo thing is better than cornbread 'n buttermilk, I tell ya!


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## MickeS (Dec 26, 2002)

http://www.tvb.org/multiplatform/multi-channel/DTV_DC_HDTV_Penetration.asp

25% of households had digital cable 6 months ago, according to them. It says that's "38.2% of the wired cable sample", whatever that means. I interpreted it as 38.2% of those who are wired for cable.


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## dstoffa (Dec 14, 2005)

MickeS said:


> I think you have too many preconceived notions about us that don't have digital cable... the vast majority of households in the US do not have digital cable. Even of those that do have cable, only about 60% have digital cable.
> 
> We're not all hicks...


My bad. But I am trying to make a point that seems to fall of deaf ears. That point is how marketable ARE DVRs? How hard is it to convince someone who doesn't have one buy / try one? At what cost? And at what cost to the marketer? Boxes have to be sold to someone to generate revenue....

We who post here are of a small and skewed sample set. We'd gladly pay for the subscription. Unfortunately, we are NOT non-subscribers.

How do you raise awareness of DVRs? How do you get them into people's homes to try? How do you convince them to keep them and paying the subscription fee? A cable company or sat provider can do this at a lower cost than Tivo, DNNA, or any other third party box maker because they can simply ask, when setting up the subscription, "Would you like a Digital Video Recorder, which allows you to record shows and pause live TV for an extra $5 per month? First month free. No obligation, and we will set it up for you, and take it away if you don't like it."

My point here is that the amount of $$$ invested in getting a new subscriber will be greater than the $$$ brought in from the hardware / software sale, which is a losing proposition, like drawing blood from a stone.


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## dstoffa (Dec 14, 2005)

SullyND said:


> My TiVo subscription on the other hand is worth every penny it costs.


Do you have a lifetimed box?

Would you still buy Tivo today, knowing you could not have lifetime?

If you would still buy Tivo today, would you spend $5 or $10 for a cable-provider box, or would you spend the $17 / month for 3 years of Tivo? and why?


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## MickeS (Dec 26, 2002)

That's what the TiVo marketing department should have figured out ages ago.  And once again, in your example it's only an option if they have digital cable.

I think that if TiVo's marketers hasn't managed to figure out how to sell it when there was no cable competition, I don't see how they'll figure it out now WITH competition, even if they do have the Series 3 which levels the playing field. 

I mean... has anyone actually seen a TiVo marketing campaign? I don't think I've ever seen one.


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## MickeS (Dec 26, 2002)

dstoffa said:


> Do you have a lifetimed box?
> 
> Would you still buy Tivo today, knowing you could not have lifetime?
> 
> If you would still buy Tivo today, would you spend $5 or $10 for a cable-provider box, or would you spend the $17 / month for 3 years of Tivo? and why?


I started out with monthly for 2 months, then I switched to lifetime, which just made more sense.

I HATE monthly fees... but I would pay more for the TiVo just because I know that my TiVo does things that I use every day and would cost me a lot of time and money to replace if I got a cable DVR (streaming music and video, online scheduling mostly).

If it had been 3 years ago, and the TiVo did nothing but DVR stuff... not so sure I would've been willing to pay more for it, if the cable DVRs were reliable.


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## SullyND (Dec 30, 2004)

dstoffa said:


> Do you have a lifetimed box?


No.



dstoffa said:


> Would you still buy Tivo today, knowing you could not have lifetime?


Yes.



dstoffa said:


> If you would still buy Tivo today, would you spend $5 or $10 for a cable-provider box, or would you spend the $17 / month for 3 years of Tivo? and why?


According to Comcast (I just checked) it would cost me $20 to get a DVR ($10 to go to Digital and $10 for the DVR). I'll keep my TiVo thank you. Now, if Comcast's Motorola 6412 w/TiVo is a decent implimentation of the TiVo OS I'd consider going with it. But for now my TiVo is clearly a better deal.

Why would I spend $17/mo for three years with TiVo. That is only one option. I can still go down to Best Buy, BUY a box, and pay $12.95/mo (Or $6.95/mo for MSD). I could still go out and BUY a HUMAX and BUY LIFETIME if I want. But for me monthly is worthwhile.


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## OldTownTreadles (Mar 15, 2006)

SullyND said:


> I do not have Digital Cable. It's an option for me, but there is no additional programming which makes having to deal with a converter box worthwhile. Of the people whom I know who have cable, only two have digital (because they have premium channels). My TiVo subscription on the other hand is worth every penny it costs.


I'll add here: I also don't have digital cable. I haven't seen anything on the premium channels that would interest me, aside from the occasional movie. And those I can get from one of our local video rental stores. Tivo, and other DVRs, on the other hand, I do have. Currently, I've got 2 lifetime tivos, one with a DVD recorder, plus an additional DVR with DVD recorder, plus a VCR with DVD recorder, and I'm trying to talk my brother into giving me his Replay as well. Yes, it does different things than the Tivo, but what's wrong with that?

But I am a hick  I live in a rural area, and when I drive down the freeway, there's cows to the right and left of me, or walls of redwoods.


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## latrobe7 (May 1, 2005)

I may smeek somewhere because I haven't read every post, but I want to put in my own thoughts, FWIW. I have an SAT-T60, series one, and, of course, DirecTV. I pay 5.99 a month for DVR service, this is the first I've heard of the $17 per mo.  

-If it came to it; DirecTV is more important to me than TiVo

-If it was $17 a month for Tivo and 5.99 a month for the DirecTV DVR, that's a no-brainer for me, I'm going cheap.

-I can't tell you one feature that TiVo has that the DVR doesn't; and I'm already a user.

From my point of view, TiVo looks a lot like Beta (we had one of those, too). It may be technically better, but only purists really care, and there's no way most people are going to pay a premium for almost the same thing.

/ducks


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## jfh3 (Apr 15, 2004)

MickeS said:


> I don't get it, why are there separate charges for "service" and for the dvr? Can you get one but not the other? Maybe it's just so they can advertise the cost of the dvr as $6.75?


dingdingding ... you got it. Welcome to the wonderful world of cable pricing.

When comparing prices vs. cable add:

DVR rental, DVR fee (sometimes called HD), required upgrade to digital service, taxes and franchise fees.

vs.

Tivo at $12.95 (or $16.95) and you own the box.

For analog subs, Tivo will always win the price comparasion.

For digital subs, the total cost of Tivo is a lot closer to the cost of a cable DVR than most people think.


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## jfh3 (Apr 15, 2004)

ZeoTiVo said:


> well what campaign would they do right now - sure the cable DVR has dual tuners and HD - and we will soon so hows about you check out all our great features on the single tuner SD in the meantime.


At this point, no campaign.

When the Series 3 is ready, go after cable with both barrels:

Series 2 - aim toward analog subs. Hit on features+total cost. No way Tivo can lose the comparasion, since most (all?) cablecos require digital service.

Series 3 - compare with existing cable offerings. Hit on features. If Tivo has bundled pricing with the Series 3 (which seems reasonable), I'll bet the $$ end up being very close. If Tivo ends up being a bit more, say $1/month, then sell "look what you get for only $1 a month".


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## dstoffa (Dec 14, 2005)

latrobe7 said:


> I may smeek somewhere because I haven't read every post, but I want to put in my own thoughts, FWIW. I have an SAT-T60, series one, and, of course, DirecTV. I pay 5.99 a month for DVR service, this is the first I've heard of the $17 per mo.
> 
> -If it came to it; DirecTV is more important to me than TiVo
> 
> ...


Thank you for seeing it the way I do.

With regards to the $17 / month, if you were to buy a new tivo today from tivo.com, you cannot get lifetime, and you must purchase the hardware bundled with service. A three-year commitment with service and hardware (which you own after the contract) is $16.95 per month for 36 months. There is a discount if you pre-pay the contract - $469.


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## jfh3 (Apr 15, 2004)

MickeS said:


> I have no clue if Series 2 will still even be available after Series 3 is released.


Are you kidding? Of course it will be. If Tivo discontinues the Series 2 and only keeps the Series 3, it's all over.


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## dstoffa (Dec 14, 2005)

jfh3 said:


> At this point, no campaign.
> 
> When the Series 3 is ready, go after cable with both barrels:
> 
> ...


How do you propose Tivo compete against Sattelite Service?


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## ChuckyBox (Oct 3, 2005)

dstoffa said:


> My bad. But I am trying to make a point that seems to fall of deaf ears. That point is how marketable ARE DVRs? How hard is it to convince someone who doesn't have one buy / try one? At what cost? And at what cost to the marketer?


Those are excellent questions that I think are lost on all of the people who know what TiVo "should" have done (obviously they should have had better marketing, because if they did, they'd have ten million subscribers now, right?). It just ain't that easy. The DVR did not catch on as well as anyone expected, and it is only now reaching a point of critical mass. Is this TiVo's fault? Hardly. Comcast, Charter, Time-Warner, etc. are all pushing DVRs, Replay tried, TiVo is still trying, Microsoft has MCE, Beyond, Sage, etc. And there are more and more users who now have DVRs and would never, ever go back to the old way of watching TV. And yet there are still tons of people who don't know what a DVR is, or if they do, don't quite see why it would be so great. It is just a very hard product to sell.

Nevertheless, TiVo's standalone base continues to grow, the company is on comfortable (if not secure) financial ground, and they are coming out with a string of new products and features that should help them appeal to the markets they have targeted. They have a deal with Comcast, and the potential for deals with other MSOs, depending on a number of factors, not the least of which is the upcoming trial with Echostar. TiVo last quarter was arguably its most significant ever, possibly demonstrating that the company has turned the corner, and Wall Street seems to agree.

TiVo isn't going anywhere. This Newsweek article is just another in a long line of "TiVo is Dead" stories that seem to appear whenever somebody needs to fill a few column inches. Hell, the story wasn't even that negative -- some editor just tagged it with a sensationalistic headline in the hopes of selling a few more copies of his rag.


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## ChuckyBox (Oct 3, 2005)

dstoffa said:


> How do you propose Tivo compete against Sattelite Service?


Why do they have to?


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## SullyND (Dec 30, 2004)

dstoffa said:


> With regards to the $17 / month, if you were to buy a new tivo today from tivo.com, you cannot get lifetime, and you must purchase the hardware bundled with service. A three-year commitment with service and hardware (which you own after the contract) is $16.95 per month for 36 months. There is a discount if you pre-pay the contract - $469.


I don't see why anyone would opt for a multi-year commitment. You do not HAVE to buy your TiVo from tivo.com, and if you do not, you do not have to go with the bundled pricing. You also have the option of purchasing a Humax unit, which is still eligible for lifetime.


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## dstoffa (Dec 14, 2005)

ChuckyBox said:


> Why do they have to?


THe marketing stradegy proposed discussed CABLE TV, and the $20 in added fees per month in going from analog to digital cable service. Satellite providers can offer DVRs much cheaper than cable, for the most part.

Tivo doesn't have to market to Sat subscribers, but that would be ignoring a chunk of the TV viewing population.


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## whatsnew (Mar 21, 2006)

When a TV program is popular most viewers don't want to wait to see it. They look forward to seeing it when it first airs. Most viewers find the "primetime" hours in the evening to be the best time to watch TV and don't want live sports events to be timeshifted either. 

Stand alone DVR's are a hassle. The way for Tivo Inc. to go is to get deals from cable companies, much as they used to have with DirecTV. An easy to use cable box with Tivo's functionality would be a strong selling point and could be a mass market product whether or not viewers wanted to watch TV live or timeshifted. A cable company could use such a box to sell its services much as DirecTV used to by, in part, subsidizing the box rental. TiVos would be a lot hotter to sell if it was a two tuner cable box for $10. a month.

Unlike standalone DVR's, DVD recorders with hard drives make great stand alone products. The Panasonic DMR E95H (and some others) play even play audio at normal pitch on their two slowest fast forward speeds. The 1.3 FF speed is great for skimming through a program. 

The Philips HDRW720/17 was a disaster as a Philips designed product. It is a one-of-a-kind product with perhaps the steepest learning curve of any video recorder. But it could have been a sensation with TiVo software! 

TiVo's strong suite is how stable and dependable its software is. A hard drive DVD recorder with TiVo software would be a real operational winner! (I wonder how it would SELL?)


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## ChuckyBox (Oct 3, 2005)

dstoffa said:


> Tivo doesn't have to market to Sat subscribers, but that would be ignoring a chunk of the TV viewing population.


It is a tough market to crack, though. There is no satellite equivalent of CableCard, so there is no way to have a dual-tuner box, and as HD becomes more prevalent, the SD standalone becomes less appealing. And, as you say, the sat DVRs are cheaper and there is no "upgrade tax" to digital. So TiVo's marketing is better spent where there is a bigger market and less competition, like the analog cable market.

And TiVo's whole strategy right now is to align with cable _against_ satellite. Analog + TiVo (and maybe internet and phone), is a good package for smaller operators to offer against satellite competition. And some of what TiVo is offering in the integrated deal with Comcast (and maybe others) is the ability to attack DTV's TiVo subs who are being orphaned by DTV's new DVR strategy. In addition, for the higher-end digital cable sub, TiVo's high-end features are more interesting and Comcast can package them with phone, internet, VOD, PPV, etc. And at the very highest end, there is the Series 3. So TiVo has the whole cable market covered, and actually help cable compete at every level.


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## btl-a4 (Dec 28, 2005)

DrStrange said:


> To-do list? Recording history? True recording priorities? Those and the many other Tivo features that make recording easy and reliable that ReplayTV never came close to matching are Tivo innovations that they've had for so long many Tivo owners have forgotten how innovative they were, and while Tivo _is_ adding the innovations ReplayTV introduced, ReplayTV never did (and now never will) catch up with the innovations Tivo has had from the beginning.
> 
> A DVRs first job is to record TV shows. Tivos innovation was a box that did that right. ReplayTV could never do that, so resorted to flashy (and often useless) "innovations" that sounded better on paper than in practice.
> 
> ...


I never once said a TiVo should behave like a replay. I had a replay and didn't like it. Maybe "innovations" wasn't the right word. What I meant to convey is that a TiVo box really hasn't changed from the first one I bought in 2000. I only recently got a Series 2 because I got it dirt cheap with lifetime. The only real changes they made was the home media stuff. Most of which you could have done with replay long before.

An ethernet port, how hard would that have been to put on? Instead you have to hunt for a specific model USB adapter. How long did it take for them to finally develop and sell thier own wireless adapter? Not to mention the fun time you had waiting for it to be in stock. Component outputs would have been a nice feature, I would have bought a new box just for that. How about an external Hard Drive for the USB port? And that's just hardware.

The day after you could connect your TiVo to the internet they should have started PPV via the internet. Even if it was two movies to start with, then work from there. I think when Itunes went live they had less than 100 songs(not sure on the number but it was real low). But it was there and it got the ball rolling.

The Ipod was release in 2001 as a Black and white, Mac only, usb connected, mp3 player that could hold 1000 songs and no internet content. Five years later a color player usable on Mac Or PC, Firewire enabled, able to store up to 15,000 songs and for the past 3 years able to download songs from the internet. Oh yeah you can now Watch, download and transfer video to this "MP3" player. That's the kind of product improvements TiVo should have been making. Instead TiVo released in 2000. Six years later still Standard Definition, Still coax and Composite outputs, still unable to buy content from the web. TiVo to Go is definetely a step in the right direction, but that should be one in an ongoing list of improvements that should have been made in the last 6 years.


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## dgh (Jul 24, 2000)

btl-a4 said:


> I never once said a TiVo should behave like a replay. I had a replay and didn't like it. Maybe "innovations" wasn't the right word. What I meant to convey is that a TiVo box really hasn't changed from the first one I bought in 2000.


The box didn't change, but if you bought in 2000, then in early 2001 you got a Season Pass Manager, Wishlists, star ratings, more recording options like padding and Keep Until I Delete and Keep at most in Season passes etc. when 2.0 came out. That's why I said in another thread that TiVo did much of their best work when they were worried about ReplayTV. Not that I would rather have a Replay but it was good to have them around and dangerous back then.


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## mrcase (Jan 1, 2006)

dstoffa said:


> If they don't have digital cable because they have chosen NOT to pay for it, then they won't be getting any DVR. Their choice NOT to get digital cable is being one of economics. I bet for those people, a VCR works fine. You can't sell ice to an eskimo.
> 
> If they don't have digital cable because it's not available, that is a different issue. I'd put my money on the hypothesis that most DVR households have digital cable.


Not true. Personally, I haven't migrated to HDTV yet because there's not a lot of programming for it yet and I think the prices will drop as we get closer to some of the federal regulations kicking in that are related to HDTV, so I've still got my old TV from college. Why would I want to pay more per month for the same channels that don't look any better than regular cable because I'm still looking at a 19 inch TV? I'm still enjoying my DVR.

I will have some serious thinking to do before I go to a series 3. I can build a pretty nice linux box for comperable money and have more multimedia features.


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## btl-a4 (Dec 28, 2005)

dgh said:


> The box didn't change, but if you bought in 2000, then in early 2001 you got a Season Pass Manager, Wishlists, star ratings, more recording options like padding and Keep Until I Delete and Keep at most in Season passes etc. when 2.0 came out. That's why I said in another thread that TiVo did much of their best work when they were worried about ReplayTV. Not that I would rather have a Replay but it was good to have them around and dangerous back then.


It's been so long I didn't realize that season pass manager wasn't around when I first got the box. I can't even remember not having season pass manager.


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## samo (Oct 7, 1999)

> I'd put my money on the hypothesis that most DVR households have digital cable.


Sounds like safe bet to me. Out of 16 million DVRs in service about 6 million are satellite, 1.5 million are SA units, so the rest of them (8.5 million) have to be digital cable DVRs.


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## jfh3 (Apr 15, 2004)

latrobe7 said:


> -If it came to it; DirecTV is more important to me than TiVo
> 
> -If it was $17 a month for Tivo and 5.99 a month for the DirecTV DVR, that's a no-brainer for me, I'm going cheap.


Use the R15 for a month and you'll want to pay DirecTV the $11 month to take it back ... 

Though my view on DirecTV is the opposite of yours - I went to DirecTV because of Tivo, but I'll probably leave DirecTV because of Tivo. The only thing DTV has I can't get with cable is Sunday Ticket and I don't care about that.


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## jfh3 (Apr 15, 2004)

dstoffa said:


> How do you propose Tivo compete against Satelite Service?


I'd focus on cable. Tivo needs to stay out of the cable vs. sat wars - just continue use the "works with cable or sat" line (for Series 2).

DirecTV has given up their Tivo trump card and just has generic DVRs like cable. As soon as Comcast has the ComcasTivo package, cable will take care of that advertising.

Dish? All going to depend on the results of the trial that starts in a couple weeks. By the time the Series 3 is announced, Dish may have announced they'll have a Tivo option ...


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## HDTiVo (Nov 27, 2002)

ChuckyBox said:


> Those are excellent questions that I think are lost on all of the people who know what TiVo "should" have done (obviously they should have had better marketing, because if they did, they'd have ten million subscribers now, right?). It just ain't that easy. The DVR did not catch on as well as anyone expected, and it is only now reaching a point of critical mass. Is this TiVo's fault? Hardly.


It is absolutely TiVo's fault. TiVo will go down in history as a prime example of failing to market succesfully a revolutionary product, with more utility than just about any other product in its field, which was literaly years ahead of anything else. Its numerous mistakes in the years it was the only serious player in the field will be analyzed by those who don't want to end up the same way.



ChuckyBox said:


> Comcast, Charter, Time-Warner, etc. are all pushing DVRs, Replay tried, TiVo is still trying, Microsoft has MCE, Beyond, Sage, etc. And there are more and more users who now have DVRs and would never, ever go back to the old way of watching TV. And yet there are still tons of people who don't know what a DVR is, or if they do, don't quite see why it would be so great. It is just a very hard product to sell.


Replay was a small company with modest brand recognition and a very flawed product relative to TiVo's. No one ever heard of Beyond, Sage, Etc. So those are not good comparisons to TiVo's position: small company with enormous brand recognition, publicity and evangelistic fan base, and visionary, nearly perfect, early products.

Cable is not known for its marketing savvy, yet from the moment the highly flawed cable DVRs have been available, the market for them has been on fire. Microsoft, also not the poster child of CE marketing, has had its flawed MCE product outsell TiVo many times over.



ChuckyBox said:


> Nevertheless, TiVo's standalone base continues to grow, the company is on comfortable (if not secure) financial ground, and they are coming out with a string of new products and features that should help them appeal to the markets they have targeted. They have a deal with Comcast, and the potential for deals with other MSOs, depending on a number of factors, not the least of which is the upcoming trial with Echostar.


TiVo is OK for the next few quarters, but if the S3 is another failure, the inevitable erosion of the analog subscriber business will keep that business at a level where it can't support the rest of TiVo's operations.

The deal(s) with cable are entirely on the come. The Comcast deal has a drop dead clause in about March 2007. Comcast has no obligation to deploy TiVo's cable software, and TiVo is largely dependant on Comcast's marketing efforts for sales. Based on past cable initiatives, there is a significant chance Comcast will not be a good marketing partner for TiVo. The money Comcast has put up for TiVo development costs is trivial to them. They would write it off without blinking. Cablevision wastes far more money on each Knick player it acquires. 

Patent lititgation results are completely speculative and rarely offer lucrative outcomes. With all the different cases and parties involved, there is a chance TiVo could end up being the one paying out money for infringment (net).



ChuckyBox said:


> TiVo last quarter was arguably its most significant ever, possibly demonstrating that the company has turned the corner, and Wall Street seems to agree.
> 
> TiVo isn't going anywhere.


There was nothing significant about the last quarter; it was totally within the range of expectations. No corners are turned when results are just expected continuations of past history.

TiVo is not going anywhere for now, but with essentially the same crew that has been running things for some years, there is no reason to assume the outcome will be favorable. So far the new initiatives have been handled sloppily and the new marketing plan is looking like it will be a fiasco. TiVo is suddenly attempting success on multiple fronts, whereas it has never demonstrated success on a single front. If TiVo doesn't make the plan work, and spends large amounts of money in a self-deluded belief that it will, the financial losses are going to be huge.

This is probably the riskiest time in TiVo's history. Their only shipping product(s) is based on a dying technology. Their future product(s) have no assurance of success, or even of reliability. TiVo is faced by multiple far more powerful competitors marketing alternative devices at lower prices.

Handling the transition to the Series 3 and Cable Software is going to be TiVo's greatest challenge ever.


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## latrobe7 (May 1, 2005)

jfh3 said:


> Though my view on DirecTV is the opposite of yours - I went to DirecTV because of Tivo, but I'll probably leave DirecTV because of Tivo. The only thing DTV has I can't get with cable is Sunday Ticket and I don't care about that.


*ding*ding*ding*ding* 

The Sunday Ticket gaurantees I will be a DirecTV customer through 2010, at least.


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## Rob Helmerichs (Oct 17, 2000)

TiVo brought me to DirecTV. I still have my DirecTiVo, but I also have a Time-Warner HD-DVR (with just locals and HBO), and the INSTANT Time-Warner/Comcast (they have a strange co-ownership thing going on here) gets TiVo, it's good-bye to DirecTV. I'm just sick of the picture quality dropping constantly on DirecTV; I hadn't noticed how bad it had gotten until I compared it to cable (and ironically, one reason I went from SA TiVo + cable to DirecTV was picture quality; what a difference a few years make!).


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## ChuckyBox (Oct 3, 2005)

HDTiVo said:


> It is absolutely TiVo's fault. TiVo will go down in history as a prime example of failing to market succesfully a revolutionary product, with more utility than just about any other product in its field, which was literaly years ahead of anything else. Its numerous mistakes in the years it was the only serious player in the field will be analyzed by those who don't want to end up the same way.


All of that assumes that there was an approach that would have worked better. All anyone can point to is what didn't work. No one can, or ever will, demonstrate that another approach would have worked better, because there is no evidence for it. TiVo's only competitor at the time was Replay, and they failed to develop the market as well.



> Cable is not known for its marketing savvy, yet from the moment the highly flawed cable DVRs have been available, the market for them has been on fire.


That is an absolute fantasy. Time-Warner has been pushing DVRs longer and harder than any other MSO, they are marketing to subscribers that they already own and to whom they can target perfectly and advertise for free, offer a cheaper product that is easier to install and is technologically more advanced, and they only recently have reached the number of subs that TiVo carved out of a previously non-existent market. And none of the other MSOs, including much bigger Comcast, have reached those numbers. If anything, that is a demonstration of how well TiVo did.



> Comcast has no obligation to deploy TiVo's cable software, and TiVo is largely dependant on Comcast's marketing efforts for sales.


You really ought to read the contract before you start making up "facts." Comcast is under obligation to deploy the software: the companies have agreed upon the minimum percentage of Comcast subscribers to whom the "TiVo Experience" will be made available. They have also agreed upon the minimum Comcast marketing spend and the types of marketing that will be employed.



> There was nothing significant about the last quarter; it was totally within the range of expectations. No corners are turned when results are just expected continuations of past history.


Sub adds were significantly in excess of what was expected. One analyst had 75K standalone, another had less than 100K. TiVo did 183K (net) with short inventory and lower Q3 and Q4 advertising spend than last year. It was a huge positive surprise. And nobody (except me, apparently) expected a positive cash flow year. Again, a big surprise. The short position in TIVO is down 25% and the stock is up 25% in the past few months. You may not think anything is different, but Wall Street disagrees.



> So far the new initiatives have been handled sloppily and the new marketing plan is looking like it will be a fiasco.


What are you talking about? Sloppily? Fiasco? What new marketing plan? Do you have anything to base any of that on?



> If TiVo doesn't make the plan work, and spends large amounts of money in a self-deluded belief that it will, the financial losses are going to be huge.


Couldn't that be said of any business, any time, always? There is always a risk of failure.



> Handling the transition to the Series 3 and Cable Software is going to be TiVo's greatest challenge ever.


How many time do you have to be told by how many people that there will be no transition to the Series 3 in the foreseeable future? It is just an additional product, targeted at the high-end HT market, and is not intended to drive volume subscriptions.


----------



## dstoffa (Dec 14, 2005)

ChuckyBox said:


> Time-Warner has been pushing DVRs longer and harder than any other MSO, they are marketing to subscribers that they already own and to whom they can target perfectly and advertise for free, offer a cheaper product that is easier to install and is technologically more advanced, and they only recently have reached the number of subs that TiVo carved out of a previously non-existent market. And none of the other MSOs, including much bigger Comcast, have reached those numbers. If anything, that is a demonstration of how well TiVo did.


So if I read this correctly, Tivo did all the work, and TW is reaping the benefits? Yes. Tivo did a great job pushing a product, only to have someone else come in and penetrate the market to comparable levels that someone else invented in a fraction of the time, and at less cost. That really demonstrates how well Tivo did.

Time-Warner and other cable ops have something Tivo will never have- LOCATION LOCATION LOCATION. They have the captive audience. Tivo does not, unless.....



ChuckyBox said:


> You really ought to read the contract before you start making up "facts." Comcast is under obligation to deploy the software: the companies have agreed upon the minimum percentage of Comcast subscribers to whom the "TiVo Experience" will be made available. They have also agreed upon the minimum Comcast marketing spend and the types of marketing that will be employed.


Has this contract been made public domain? How do you know what is in it? Or do you simply beleive what each side is telling you?



ChuckyBox said:


> How many time do you have to be told by how many people that there will be no transition to the Series 3 in the foreseeable future? It is just an additional product, targeted at the high-end HT market, and is not intended to drive volume subscriptions.


So the Series 2 subscribers will be subsidizing the R&D for a high-end niche market, paying indirectly for something they will never use (no more lifetime, remember)? Brilliant strategy.


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## HDTiVo (Nov 27, 2002)

Chucky:

I wonder what your motivation is for being so confrontational? You seem very interested in the stock. Together with the ridiculous DTV buyout rumor you participated in spreading, it really seems you are trying to get the stock price up.

Anyway, your analysis is at the level of a sell side analyst. It contains no balance against downside risks.



> All of that assumes that there was an approach that would have worked better. All anyone can point to is what didn't work. No one can, or ever will, demonstrate that another approach would have worked better, because there is no evidence for it. TiVo's only competitor at the time was Replay, and they failed to develop the market as well.


As to your first point, there is the known failure against the possibilty that there was a more successful approach. That alone gives my view greater weight. Cable DVR has shown there is a succesful approach in that segment. Other businesses in similar circumstances have found success. There are established business formulas which have commonly led to success which TiVo never followed.

I'll address your other issues when I have more time later.


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## SullyND (Dec 30, 2004)

HDTiVo said:


> I wonder what your motivation is for being so confrontational?


Somebody really needs to get themselves a mirror.


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## jfh3 (Apr 15, 2004)

HDTiVo said:


> The Comcast deal has a drop dead clause in about March 2007. Comcast has no obligation to deploy TiVo's cable software, and TiVo is largely dependant on Comcast's marketing efforts for sales. Based on past cable initiatives, there is a significant chance Comcast will not be a good marketing partner for TiVo.


In general, I agree with your post, but can you explain what you mean by "drop dead clause"? I'm not aware of this.


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## ChuckyBox (Oct 3, 2005)

dstoffa said:


> So if I read this correctly, Tivo did all the work, and TW is reaping the benefits?


You read it incorrectly. A lot has changed since TiVo originally went on the market -- price being one big factor. DVR awareness among consumers is finally becoming a little broader -- TiVo is responsible for some, but not all of that. It is a different market and a different product now than it was in 1999. The growth in the industry is happening now. To assume that it could have happened five or six years ago if TiVo had had better TV ads or something (as some people seem to assume) is just not realistic.



> Time-Warner and other cable ops have something Tivo will never have- LOCATION LOCATION LOCATION. They have the captive audience. Tivo does not, unless.....


I'm pretty sure I said this in my post.



> Has this contract been made public domain? How do you know what is in it? Or do you simply beleive what each side is telling you?


It was published in TiVo's 10-K last year. Many of the specifics have been excised (including dollar amounts, timelines, etc.), but there is enough there to know what the deal consists of and that particular targets were set.



> So the Series 2 subscribers will be subsidizing the R&D for a high-end niche market, paying indirectly for something they will never use (no more lifetime, remember)? Brilliant strategy.


Do you think Lexus makes enough to produce its cars independently of Toyota? It doesn't. Not even close. Toyota drivers heavily subsidize the R&D that goes into them. Not to mention the production and purchasing efficiencies that Toyota can leverage for Lexus.


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## HDTiVo (Nov 27, 2002)

ChuckyBox said:


> All of that assumes that there was an approach that would have worked better. All anyone can point to is what didn't work. No one can, or ever will, demonstrate that another approach would have worked better, because there is no evidence for it. TiVo's only competitor at the time was Replay, and they failed to develop the market as well.


Answered above.



ChuckyBox said:


> That is an absolute fantasy. Time-Warner has been pushing DVRs longer and harder than any other MSO, they are marketing to subscribers that they already own and to whom they can target perfectly and advertise for free, offer a cheaper product that is easier to install and is technologically more advanced, and they only recently have reached the number of subs that TiVo carved out of a previously non-existent market. And none of the other MSOs, including much bigger Comcast, have reached those numbers. If anything, that is a demonstration of how well TiVo did.


Time Warner represents perhaps 20% of cable customers, in contrast to TiVo's market being 100% of cable customers plus a large number of other TV watchers. In a fraction of the time, TW has marketed to an even more limited segment - digital/HD cable. TW limits its marketing to less than 10% of the number of potential customers that TiVo does, yet it has blown TiVo away in penetration (both total and per time involved.) Does TW have advantages? Yes. TiVo also has very significant advantages: 10X market size; superior product; brand name; first mover, and time at market; etc.



ChuckyBox said:


> You really ought to read the contract before you start making up "facts." Comcast is under obligation to deploy the software: the companies have agreed upon the minimum percentage of Comcast subscribers to whom the "TiVo Experience" will be made available. They have also agreed upon the minimum Comcast marketing spend and the types of marketing that will be employed.





10Q said:


> On March 15, 2005, the Company entered into a non-exclusive licensing and marketing agreement with Comcast STB Software DVR,
> LLC, a wholly-owned subsidiary of Comcast Corporation, and Comcast Corporation, as guarantor of Comcast STBs obligations under the
> agreement. Pursuant to this agreement, the Company has agreed to develop a TiVo-branded software solution for deployment on Comcasts
> DVR platforms, which would enable any TiVo-specific DVR and networking features requested by Comcast, such as WishList ® searches,
> ...


I may not be privy to certain inside information that you may have, however reading the TiVo 10Q shows a number of potentially negative issues you ignore. There is a 2 year development and deployment drop dead date (3/15/07.) Comcast is entitled to reduced fees if other cable companies get a better deal. Comcast is working another DVR deployment with Microsoft at the same time. TiVo admits the risk of mass deployment, and only mentions contract extension rights as subject to deployment thresholds; there is no mention of payments to TiVo should Comcast fail to reach certain marketing goals.



ChuckyBox said:


> Sub adds were significantly in excess of what was expected. One analyst had 75K standalone, another had less than 100K. TiVo did 183K (net) with short inventory and lower Q3 and Q4 advertising spend than last year. It was a huge positive surprise. And nobody (except me, apparently) expected a positive cash flow year. Again, a big surprise. The short position in TIVO is down 25% and the stock is up 25% in the past few months. You may not think anything is different, but Wall Street disagrees.


Sub adds were in line with expectations - which had a wide range - and were significantly less than last year on a larger base. While still a growing company, TiVo's growth is slowing. Churn is much higher - though down slightly from the prior QTR. The difference between Gross Adds and Net Adds expanded significantly. SAC was $157 vs $140 last year (Q4 comparison), leaving TiVo's marketing significantly less efficient than last year.

TiVo's cash flow story is completely misleading. TiVo's $3.4M in FY06 operating cash flow includes about $20M in deferred revenue. Not including upfront/advanced payments for service, TiVo's operating cash flow was about $-17M. TiVo also sourced operating cash flow by decreasing accounts receivable and finished goods inventory by some $6.9M, and increasing accounts payable and accrued liabilities by some $9.6M. Healthy cash flows are not generated by these methods.

You want to "talk stock?" TiVo is down about 50% over the last 2.5yrs. It is down some 90% from its all time highs in '99/2000.



ChuckyBox said:


> What are you talking about? Sloppily? Fiasco? What new marketing plan? Do you have anything to base any of that on?


You know very well TiVo has just launched a new marketing plan. The handling has been sloppy, with rules changing almost daily and details coming out slowly after the plan was initiated. Yes, I do expect TiVo is more likely to fail with their new plan than succeed.



ChuckyBox said:


> Couldn't that be said of any business, any time, always? There is always a risk of failure.


Yes, so why do you leave it out of your analysis? You write as if victory is, if not assured, the most likely scenario, without much comment on risks.



ChuckyBox said:


> How many time do you have to be told by how many people that there will be no transition to the Series 3 in the foreseeable future? It is just an additional product, targeted at the high-end HT market, and is not intended to drive volume subscriptions.





10Q said:


> Additionally,to the extent that potential customers defer subscribing to the TiVo service in order to wait for future announced, but not deployed, TiVobranded DVR solutions from our licensing partners, such as Comcast, the growth of our TiVo-Owned subscriptions could be reduced. If the growth in our TiVo-Owned subscriptions is reduced, our business could be harmed.


Perhaps you are not familiar with the nature of product transitions for technology companies. They are typically difficult and usually only experienced and savvy managements navigate the transitions without problems.

I believe I have touched on every one of your issues.


----------



## ChuckyBox (Oct 3, 2005)

HDTiVo said:


> You seem very interested in the stock.


I only mention financial (stock) details in response to other people's posts discussing those issues, or in response to the "TiVo is doomed" mentality.

The idea that the price of TiVo's stock could be affected by me posting on this board is laughable and shows a... lack of awareness... of what drives the stock market.



> As to your first point, there is the known failure against the possibilty that there was a more successful approach. That alone gives my view greater weight.


So my belief that there are fairies living in the woods outside my home has greater weight than the complete lack of evdience that there are simply because there is a "possibility" that there are fairies in the woods? You must be a creationist.


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## EwanG (Oct 14, 2002)

HDTiVo said:


> It is absolutely TiVo's fault. TiVo will go down in history as a prime example of failing to market succesfully a revolutionary product, with more utility than just about any other product in its field, which was literaly years ahead of anything else. Its numerous mistakes in the years it was the only serious player in the field will be analyzed by those who don't want to end up the same way.


Obviously written by someone who never owned a Commordore Amiga - a system that had 4096 color graphics when the IBM PC was just getting 16 color VGA, and could support multitasking when the best you could do on the IBM was using DesqView or Windows/386 (shudder...).

There have been many tech products out there that were superior, but that the marketing department of the company couldn't handle. Often because it was hard to show why the product was superior to people who couldn't put their hands on them to see.

As for lessons learned, I think the only lesson the tech industry has ever learned from watching the failure of another tech company has been the experience that Osborne Computers had with announcing a great new product six months before it would be available - and while it still had a sizable number of older units still in the pipeline. I'd say that TiVo shows they've learned that lesson based on how they're handling the series 3 rollout...


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## ChuckyBox (Oct 3, 2005)

HDTiVo said:


> TiVo's cash flow story is completely misleading. TiVo's $3.4M in FY06 operating cash flow includes about $20M in deferred revenue.


And? You're the one who has been all over the forum talking about how little these revenues cost TiVo. So something like 75% to 80% of that revenue will eventually be (gross) profit.



> TiVo also sourced operating cash flow by decreasing accounts receivable and finished goods inventory by some $6.9M, and increasing accounts payable and accrued liabilities by some $9.6M. Healthy cash flows are not generated by these methods.


Its funny how you can find those numbers but somehow missed $6.6M in prepaid expenses that worked against cash. And since AR and AP are in rough balance, it would be hard to suggest that TiVo is pulling any stunts. And accrued liabilities are primarily rebates, so it isn't like TiVo is intentionally building them up (and there is no telling what the redemption rate will be).



> You want to "talk stock?" TiVo is down about 50% over the last 2.5yrs. It is down some 90% from its all time highs in '99/2000.


LOL. Let's make a list of stocks that are down 90% or more since their '99/'00 highs. It'll be fun. We'll laugh. We'll cry. We'll reminisce about the good old days.



> You know very well TiVo has just launched a new marketing plan. The handling has been sloppy, with rules changing almost daily and details coming out slowly after the plan was initiated.


All I've seen of the new marketing plan is the new pricing structure and a few ads on some web sites. I don't think I'm in the target market, so I wouldn't expect to see a lot. But I don't see anything sloppy about it -- they've announced the new pricing, and except for trying to accomodate all us busybodies on TC, the plan doesn't seem to have changed in any way that a potential customer would notice.

Maybe someone should start an official TiVo marketing program spotting thread so we can figure out what they're actually doing.



> I believe I have touched on every one of your issues.


Hardly. I have many, many issues that you couldn't even begin to guess at.


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## dubluv (Mar 3, 2006)

i think tivo should look at how GM offers 'onstar' service. they install it in most gm cars, and you get to use if for a year for free. after that, customers will have to pay the monthly fee. now i'm not saying tivo should give a year (would be nice, but probably not cost effective) free service, but how about the 'first 3 months free'??? i think that would hook a lot of people who otherwise might not ever try tivo. and we all know once you've got it, and played with it a bit, you are hooked. when i left directv last year, it was because directv wanted a few hundred dollars for HD hardware (receivers, dish etc). i missed my directv tivo, but just got the SA box from my new cable service. well, that SA box was no tivo, and my wife groaned every day how tedious it was to use. a month later the SA dvr was gone, and we had our first series 2.


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## HDTiVo (Nov 27, 2002)

ChuckyBox said:


> And? You're the one who has been all over the forum talking about how little these revenues cost TiVo. So something like 75% to 80% of that revenue will eventually be (gross) profit.


You have mixed margins (profit) and cash flow. They can not be compared against each other. Even worse, you are looking at operating margin on one piece of a business entity against operating cash flow on the entire entity.



ChuckyBox said:


> Its funny how you can find those numbers but somehow missed $6.6M in prepaid expenses that worked against cash.


The $6.6M belongs back in, which leaves operating cash flow ex-deferred revenues at about $-10M. Taking out the other $16.5M I mentioned previously leaves about $-26.5M in adjusted operating cash flow.



ChuckyBox said:


> And since AR and AP are in rough balance, it would be hard to suggest that TiVo is pulling any stunts.


AR and AP are never expected to be in balance, even in the simplest business, such as a lemonade stand. Such "balance" is coincidental and meaningless. Furthermore, AP is about $4M more than AR, whereas at the end of FY05 AP was $7M less than AR; an $11M negative turnaround year over year, which can be and is meaningful in this case.

One could legitimately look at current assets vs. current liabilities: 146M vs 119M. Current net worth then is $27M, down by $23M from FY05. Beyond that, $58M in current deferred revenues should also be taken out of the current ratio analysis, leaving about $-31M in current net worth.

Now, that last does not say TiVo doesn't have the cash in the near term to pay its bills; it obviously does. What it says is that over a longer time period, TiVo will need to find other cash to make up the deficit. That's because revenues will be reported without cash being received, so cash flow will be below net profit.



ChuckyBox said:


> And accrued liabilities are primarily rebates, so it isn't like TiVo is intentionally building them up (and there is no telling what the redemption rate will be).


The accrued liabilities are supposed to reflect accounting estimates of future redemption rates. The actual rate may favor or hurt TiVo. Last year it happened to favor TiVo, according to them. In any event, the accrued liabilities are due in the near term as are other current liabilities, and properly belong in the analysis of current ratio.



ChuckyBox said:


> LOL. Let's make a list of stocks that are down 90% or more since their '99/'00 highs. It'll be fun. We'll laugh. We'll cry. We'll reminisce about the good old days.


What point are you making here?



ChuckyBox said:


> All I've seen of the new marketing plan is the new pricing structure and a few ads on some web sites. I don't think I'm in the target market, so I wouldn't expect to see a lot. But I don't see anything sloppy about it -- they've announced the new pricing, and except for trying to accomodate all us busybodies on TC, the plan doesn't seem to have changed in any way that a potential customer would notice.


In my judgement, TiVo's prices and terms are off the mark. I have stated the details in other posts/threads. And yes, I do trust my judgement over TiVo's.



ChuckyBox said:


> Maybe someone should start an official TiVo marketing program spotting thread so we can figure out what they're actually doing.


Any reliable information is helpful.



ChuckyBox said:


> So my belief that there are fairies living in the woods outside my home has greater weight than the complete lack of evdience that there are simply because there is a "possibility" that there are fairies in the woods? You must be a creationist.


Don't understand the statement, however it seemed to be a response to my point that TiVo's performance to date is known and has some bearing on weighing the odds of its future performance.



ChuckyBox said:


> The idea that the price of TiVo's stock could be affected by me posting on this board is laughable and shows a... lack of awareness... of what drives the stock market.


Could you elaborate on what you think drives the stock market, particularly as that relates to TiVo?



ChuckyBox said:


> I only mention financial (stock) details in response to other people's posts discussing those issues, or in response to the "TiVo is doomed" mentality.


I haven't seen people bringing up stock; only you brought it up with the "Wall Street disagrees" comment. The simplistic "TiVo is doomed" comments are easily refuted with a bit of analysis of the financial statements, which you have seen me do already.

The other comments I have made regarding TiVo's financial statements were in refutation of TiVo's assertion that it could no longer afford to offer Lifetime. TiVo can offer Lifetime profitably, it has made a choice to do otherwise.



ChuckyBox said:


> Hardly. I have many, many issues that you couldn't even begin to guess at.


Well, I've addressed the issues you have articulated.


----------



## dgh (Jul 24, 2000)

ChuckyBox said:


> I have many, many issues that you couldn't even begin to guess at.


Man it's hard to resist a line like that but I'm trying to be good.


----------



## ChuckyBox (Oct 3, 2005)

HDTiVo said:


> You have mixed margins (profit) and cash flow. They can not be compared against each other. Even worse, you are looking at operating margin on one piece of a business entity against operating cash flow on the entire entity.


Oy. I'm not mixing up anything, I'm offering an alternate accounting treatment. You are the one who brought up deferred revenue as if it were some sort of blot against cash. There is no actual thing called "deferred revenue." Nobody pays in deferred dollars. It is a construct. It is money the company owes itself. Deferred revenue sits on the balance sheet as a liability offsetting cash, but unlike other liabilities it moves through the income statement at some margin, and whatever is left can go back to the balance sheet. Or you could dispense with the entire exercise and just approximate the cash value to the business up front.



> The $6.6M belongs back in, which leaves operating cash flow ex-deferred revenues at about $-10M. Taking out the other $16.5M I mentioned previously leaves about $-26.5M in adjusted operating cash flow.


See? You are deducting the cash without erasing the offsetting liability.



> AR and AP are never expected to be in balance, even in the simplest business, such as a lemonade stand.


All of the lemonade stands I am aware of are pure cash businesses. What are typical AR and AP items of a lemonade stand in your experience? What kind of terms does an eight-year-old get from Safeway?



> Such "balance" is coincidental and meaningless. Furthermore, AP is about $4M more than AR, whereas at the end of FY05 AP was $7M less than AR; an $11M negative turnaround year over year, which can be and is meaningful in this case.


Yes, it is meaningful. It means they are phasing out old products and bringing in new.



> One could legitimately look at current assets vs. current liabilities: 146M vs 119M. Current net worth then is $27M, down by $23M from FY05. Beyond that, $58M in current deferred revenues should also be taken out of the current ratio analysis, leaving about $-31M in current net worth.
> 
> 
> > There you go with the deferred revenue again. Just what is your point with that?
> ...


----------



## dstoffa (Dec 14, 2005)

lajohn27 said:


> Laugh-In was indeed a better show... that's for sure.


You bet your sweet bippie!


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## HDTiVo (Nov 27, 2002)

ChuckyBox said:


> Oy. I'm not mixing up anything, I'm offering an alternate accounting treatment. You are the one who brought up deferred revenue as if it were some sort of blot against cash. There is no actual thing called "deferred revenue." Nobody pays in deferred dollars. It is a construct. It is money the company owes itself. Deferred revenue sits on the balance sheet as a liability offsetting cash, but unlike other liabilities it moves through the income statement at some margin, and whatever is left can go back to the balance sheet. Or you could dispense with the entire exercise and just approximate the cash value to the business up front.
> ....
> There you go with the deferred revenue again. Just what is your point with that?
> ....
> What? Revenues reported without cash received? Why isn't cash received? What happened?


I put these three parts back together for you because taken together you might understand the concept better. In the case of payments for goods/services prior to delivery (ie. in TiVo's case 1yr pre-pay or Lifetime, and going forward the 1,2,3yr pre-pays...) cash is received immediately, however revenues are reported over a time period. In those future time periods in which revenue is reported, no actual cash is received because it was already received day one. The point of looking at deferred revenues relative to cash position is that the deferred revenues represent that future revenue which is unfunded by future cash receipts. To the extent that cash is less than deferred revenue, the company may not have enough cash in the long run to fund its operations.

Look at this example. I pay $200 today to you and you promise to give me an apple a day for 1 year. Each apple costs $.65 retail and you pay $.50 wholesale. Case 1) With the $200 you earn some interest and are able to meet your obligation totaling $162.50 for the year and have a nice profit (say $45 or 22.5% net margin.) Case 2) You spend $75 of the $200 to try to acquire another customer, but you do not get the customer. You have, with interest, maybe $130 to fulfill your $162.50 obligation. Late in the year, you are going to default.

If other net assets on the balance sheet compensated for the type of short fall found in the above example, this would not be a problem. However, in TiVo's case, its adjusted current net worth (ex-deferred revs) comes to about $-31M. Adjusted long term net worth is about $-152M.

Over time, the $125M in deferred revenues will generate about 70% operating profit margin (average net on sub services business over all subs - however the 70% is almost certainly excessively high because margins on Lifetime are much lower than the 70% average.) That (optimistic) margin of $87M or so will add back into the $-152M, leaving the future balance sheet with a $-65M net worth.

To overcome that deficit, TiVo will need to add enough new subscribers at prices and costs which make up for earlier losses.



ChuckyBox said:


> See? You are deducting the cash without erasing the offsetting liability.


Mathematically I have treated this correctly, and I was dealing with flows, not Balance Sheet line items. I deduct some sources of operating cash flow, for reasons previously explained, in two stages, and show that the adjustments after stage 1 leave TiVo with a negative operating cash flow, and that stage 2 adjustments exacerbate the situation.



ChuckyBox said:


> All of the lemonade stands I am aware of are pure cash businesses. What are typical AR and AP items of a lemonade stand in your experience? What kind of terms does an eight-year-old get from Safeway?


In the extraordinary special case AR and AP may both be considered zero. This is somewhat of a misnomer, because the child's lemonade stand does not impute any rent for the space used nor any salary to even the sole proprietor. In real business terms, even the lemonade stand has some AP.



ChuckyBox said:


> Yes, it is meaningful. It means they are phasing out old products and bringing in new.


You said previously TiVo is not going through a product transition, now you see there is a transition. Phasing out new for old is part of the transition; in navigating the transition, you see one of the negative effects on the financial statement. Beyond that, TiVo's rate of growth slowed, so in this situation, the change in AP/AR I pointed out is also a reflection of the slowing sales.



ChuckyBox said:


> My comment about the stock was about the current situation and the prospects for the future. Your response about stock prices six years ago was utterly irrelevant, not only because it deals with the past, but also because many companies, even fairly stable, profitable ones like JNPR are more than 90% off their highs from those days.


The long history of a stock's price is far more revealing about a company's underlying real world performance than a short period. To decide that history can be put aside requires clear evidence of major positive changes. TiVo has not provided any such evidence to date.



ChuckyBox said:


> hdtivo said:
> 
> 
> > In my judgement, TiVo's prices and terms are off the mark. I have stated the details in other posts/threads. And yes, I do trust my judgement over TiVo's.
> ...


Why what?



ChuckyBox said:


> hdtivo said:
> 
> 
> > Could you elaborate on what you think drives the stock market, particularly as that relates to TiVo?
> ...


Because you made a claim about what Wall Street thinks regarding TiVo and an implication regarding "a... lack of awareness... of what drives the stock market." which you need to explain.


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## lajohn27 (Dec 29, 2003)

HDTIVO said:


> To overcome that deficit, TiVo will need to add enough new subscribers at prices and costs which make up for earlier losses.


And they just did exactly that with their new pricing policy.


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## HDTiVo (Nov 27, 2002)

lajohn27 said:


> And they just did exactly that with their new pricing policy.


No. They have done the pricing part. They have not yet done the "enough new subscribers at cost part."


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## lajohn27 (Dec 29, 2003)

They have made a movement to correct a bad pricing policy was my point.


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## ChuckyBox (Oct 3, 2005)

HDTiVo said:


> I put these three parts back together for you because taken together you might understand the concept better.


LOL. I don't need you to explain deferred revenue to me, I need you to explain why you don't think it counts as cash flow...



> To overcome that deficit, TiVo will need to add enough new subscribers at prices and costs which make up for earlier losses.


And here, finally, you do. Of course TiVo needs to continue to add subscribers to maintain positive cash flow. The business is running at a loss, they've got to get money somewhere and they can't borrow or sell stock unless the market believes they have a clear path to profitability and growth.

But the point is, and has been all along, that TiVo has added enough subs to keep paying the bills. The new model allows for upfront payments that (as was pointed out in the latest conference call) behave very much like the lifetime payments from an accounting standpoint. Stuart West also said, at a recent investor conference, that they can adjust the discounts on those upfront payments to maintain cash flow.



> You said previously TiVo is not going through a product transition, now you see there is a transition.


No, previously I said the Series 3 was not going to replace the Series 2. My comment had nothing to do with the Series 3.



> Why what?


Why do you trust your judgement over TiVo's?



> Because you made a claim about what Wall Street thinks regarding TiVo and an implication regarding "a... lack of awareness... of what drives the stock market." which you need to explain.


My point was that my posting on this message board does not drive the stock market. If you think it does, nothing I can say will ever convince you otherwise, and I have no interest in trying. You are going to think what you want to think, and my denial isn't going to change it any more than a lenghty, pointless discussion of stock market dynamics will.


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## HDTiVo (Nov 27, 2002)

ChuckyBox said:


> LOL. I don't need you to explain deferred revenue to me, I need you to explain why you don't think it counts as cash flow...
> 
> And here, finally, you do. Of course TiVo needs to continue to add subscribers to maintain positive cash flow. The business is running at a loss, they've got to get money somewhere and they can't borrow or sell stock unless the market believes they have a clear path to profitability and growth.
> 
> But the point is, and has been all along, that TiVo has added enough subs to keep paying the bills. The new model allows for upfront payments that (as was pointed out in the latest conference call) behave very much like the lifetime payments from an accounting standpoint. Stuart West also said, at a recent investor conference, that they can adjust the discounts on those upfront payments to maintain cash flow.


What you are still missing is that TiVo has significantly outspent (mainly through SAC) the advanced service payments they have received. The money is not in the bank to pay for those long term obligations. They sustain their ability to continue in the near term by collecting new cash from folks in return for more service obligations. At some point, after the music stops (sub adds die out,) TiVo will run out of cash to meet its obligations. The only way to get on solid long term footing is to adjust SAC and pricing in a mix that will provide enough new subscribers at enough profit to cover the old losses.

TiVo has not yet demonstrated it has done this.



ChuckyBox said:


> No, previously I said the Series 3 was not going to replace the Series 2. My comment had nothing to do with the Series 3.


That's quite different from your earlier statement:


ChuckyBox said:


> How many time do you have to be told by how many people that there will be no transition to the Series 3 in the foreseeable future? It is just an additional product, targeted at the high-end HT market, and is not intended to drive volume subscriptions.


There is a transition going on, even now, because the Series 3 is known to be coming out in a few months. To not recognize it and leave it out of forecasts is a mistake.



ChuckyBox said:


> Why do you trust your judgement over TiVo's?


A long career of correctly assessing business strategies, to begin with.



ChuckyBox said:


> My point was that my posting on this message board does not drive the stock market. If you think it does, nothing I can say will ever convince you otherwise, and I have no interest in trying. You are going to think what you want to think, and my denial isn't going to change it any more than a lenghty, pointless discussion of stock market dynamics will.


So your earlier comments are just unsupported fluff and insults or posturing.


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## HDTiVo (Nov 27, 2002)

lajohn27 said:


> They have made a movement to correct a bad pricing policy was my point.


OK. They have made a move. Let's see what results.


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## ChuckyBox (Oct 3, 2005)

HDTiVo said:


> What you are still missing is that TiVo has significantly outspent (mainly through SAC) the advanced service payments they have received. The money is not in the bank to pay for those long term obligations. They sustain their ability to continue in the near term by collecting new cash from folks in return for more service obligations. At some point, after the music stops (sub adds die out,) TiVo will run out of cash to meet its obligations. The only way to get on solid long term footing is to adjust SAC and pricing in a mix that will provide enough new subscribers at enough profit to cover the old losses.


Wait a minute. Aren't you the guy that was all over the board saying that the old model would have worked given more time? Now you are saying that it needed changing or they would have run out of cash. But TiVo did change it -- to a model that they believe will produce more subscribers at a higher per-sub NPV. A plan that you've been complaining about as both ineffective and unnecessary since they introduced it.

I wasn't even in disagreement with your original contention -- as the sub base grew, and the per-sub expenses dropped, the business would have been less and less dependent on upfront cash. But I do think the new model has the potential to get there faster.



> TiVo has not yet demonstrated it has done this.


Can we give them more than two weeks to do so? How about a couple of quarters?



> There is a transition going on, even now, because the Series 3 is known to be coming out in a few months. To not recognize it and leave it out of forecasts is a mistake.


I make a distinction between introducing a new product, and a product transition. But if you want to account for the Series 3, feel free. Given that we have to guess at the cost, pricing, potential demand, release date, marketing strategy, and almost everything else about the box, I don't have any idea where to start. If you think you can constrain the variables enough for useful financial forecasting, I'd be interested to see what you've got.



> A long career of correctly assessing business strategies, to begin with.


Don't you find your lack of access to TiVo's internal marketing and sales data to be a limitation in evaluating existing (and proposing future) sales and marketing plans?



> So your earlier comments are just unsupported fluff and insults or posturing.


Whatever you want to think. I am not interested in discussing the stock market with you.


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## ChuckyBox (Oct 3, 2005)

Have a look at this post in Stephen's blog. It's pretty funny. I know, I know -- it hard to believe, but there it is: funny. Not funny like I'm funny, but still worthy of encouragement.

Edit: Hmm, maybe I'll start a new thread about this so folks who have given up on this one can see it.


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## HDTiVo (Nov 27, 2002)

ChuckyBox said:


> Can we give them more than two weeks to do so? How about a couple of quarters?


That is what I would like you to do because what you wrote sounded as if victory is assured. I am presenting the upside and the risks, together with some color about what TiVo needs to do to make it work.



ChuckyBox said:


> I make a distinction between introducing a new product, and a product transition. But if you want to account for the Series 3, feel free. Given that we have to guess at the cost, pricing, potential demand, release date, marketing strategy, and almost everything else about the box, I don't have any idea where to start. If you think you can constrain the variables enough for useful financial forecasting, I'd be interested to see what you've got.


That's fine to make a distinction, but you dismissed the downside elements in your presentation and it sounded like you were not even considering it as a form of transition associated with risks.



ChuckyBox said:


> Don't you find your lack of access to TiVo's internal marketing and sales data to be a limitation in evaluating existing (and proposing future) sales and marketing plans?


Sure it is a limit. But it doesn't stop me from outlining a far superior marketing model with the exact numbers subject to such market research (or other accurate research.)



ChuckyBox said:


> Wait a minute. Aren't you the guy that was all over the board saying that the old model would have worked given more time? Now you are saying that it needed changing or they would have run out of cash. But TiVo did change it -- to a model that they believe will produce more subscribers at a higher per-sub NPV. A plan that you've been complaining about as both ineffective and unnecessary since they introduced it.
> 
> I wasn't even in disagreement with your original contention -- as the sub base grew, and the per-sub expenses dropped, the business would have been less and less dependent on upfront cash. But I do think the new model has the potential to get there faster.


I need to briefly summarize what I have been saying

1. TiVo's profit problem was not its pricing but its SAC. The part of the old model that could have worked was its price levels.

2. TiVo's subscriber acquisition lagged because of the complexity of purchase, which effectively caused inefficiencies that raised SAC.

3. It is not clear, because of pricing and terms, that TiVo's new plan will be any more effective than the old one.TiVo's new plan has the possibility of leading to significant profits, but the future outcome is very much at risk due to high pricing and troublesome terms, which could lead to serious failure. TiVo could have adopted a more conservative plan with a much higher likelihood of positive outcome and possibly just as lucrative.

Since first hearing about the market research being done, I was very enthusiastic about the kind of marketing model being talked about wherein there would be Zero Upfront and All Upfront pricing. That was of course an abstract concept, but the existing model was not getting sales done in the kind of numbers possible and costing far too much money to acquire each subscriber (SAC.) Therefore the hope was for a new plan which would drive subscriber growth with far lower SAC.

TiVo's problem has never been its subscription pricing so much as the mechanics of purchasing which have helped lead to excessive SAC. Both payment and activation were always multistep processes; ie. 1. order/pay for box, 2. pay for and activate service; 3. obtain rebate. (3 steps)

TiVo needed three simple purchase choices 1) All upfront Buy the box w/ Lifetime for a one time set fee at the POS (TiVo or retail) and when it arrives (is brought) home and is plugged in its subbed automatically without any further user communication with TiVo. (1 step) 2) Mixed Upfront Pay for the box and provide credit card for monthly billing all at POS (TiVo or retail); again box is subbed automatically. (1 step) 3) No(Zero) Upfront Finance/lease box for monthly fee by providing credit card; again box is subbed automatically. (1 step)

Then the actual plan was announced. TiVo claimed it was not raising prices; that it could not afford to keep selling Lifetime to old ("written off") or new boxes; offered no true All Upfront option; substantially increased cost of ownership; and set a variety of conditions on the new offerings.

TiVo's claim that it is not raising prices I have shown for the marketing speak that it is.

TiVo's claim that it could not afford to offer Lifetime I showed was not correct; that prior sales of Lifetime were profitable*; that going forward sales of Lifetime (on old and new boxes) would be profitable; and that only the profitability of forward sales was relevant anyway. The fact is that TiVo has chosen to offer a set of options relative to which "Bundled Lifetime" would have to be priced around $599 vs $368 previously to make sense. (*Profit referring to operating profits on the subscription business - which with enough subs, and/or lower SAC (from a proper marketing plan) could lead to overall corporate profitability.)

The lack of an All Upfront option is a severe flaw in the plan. Purchasing a CE device outright is the way consumers are most accustomed to buying. There is a significant potential customer base that buys premium products and brands outright; the folks that buy expensive amplifiers for "cash" or on the charge card with payments over 18 months (incidentally an important opportunity TiVo takes away from retailers.)

Despite cost of ownership not being the problem, TiVo has raised it substantially in conjunction with the new plan, putting it at greater risk with an additional variable - the new plan must be so effective in sales as to overcome the higher prices.

The new plan continues the complexity of ownership. You have to remember to call TiVo in 1-3 years to get the best price on service. You have to make long commitments to paying for service without full protection against breakdown or obsolescence; you cannot recoup costs by transferring (selling) your term plan nor by selling a (non-existent) Lifetime box.You have to buy service from a sole source provider without being able to determine pricing in advance (Lifetime).

If you look at the post that has recently been part of my sig, you will see an outline of the kind of plan TiVo should have.



ChuckyBox said:


> Whatever you want to think. I am not interested in discussing the stock market with you.


Nor I with you. I'd prefer sticking to balanced presentations with educated guesses about the future.


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## MickeS (Dec 26, 2002)

HDTiVo said:


> TiVo needed three simple purchase choices 1) All upfront Buy the box w/ Lifetime for a one time set fee at the POS (TiVo or retail) and when it arrives (is brought) home and is plugged in its subbed automatically without any further user communication with TiVo. (1 step) 2) Mixed Upfront Pay for the box and provide credit card for monthly billing all at POS (TiVo or retail); again box is subbed automatically. (1 step) 3) No(Zero) Upfront Finance/lease box for monthly fee by providing credit card; again box is subbed automatically. (1 step)


I agree, I don't understand why TiVo could not have done this. When I bought my computer at Best Buy, they also signed me up for my Internet service - it was all done there, no further calls were necessary.

When I got my TiVo, directly from TiVo, I had to hook it up, and then call them and buy the service. It makes no sense, since this was directly from TiVo! That must've cost them something extra, money that could have been better spent...

As I understand it now, though, when you buy a TiVo from their website, you choose the plan, and it's subbed when you get it right? So that should help them a little bit, if that's the case. Of course, that's how it should be when you buy it from a retailer too.


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## ChuckyBox (Oct 3, 2005)

HDTiVo said:


> That is what I would like you to do because what you wrote sounded as if victory is assured. I am presenting the upside and the risks, together with some color about what TiVo needs to do to make it work.


I was responding to "negative" presentations of the situation (the Newsweek article, "TiVo is doomed" posts, etc.) by pointing out a number of significant positives that are frequently ignored or overlooked. I am well aware that there are risks and potential sources of failure for TiVo (or any company, for that matter), but I don't think informal discussions on message boards require "safe harbor" statements or a prospectus-like litany of risks.



> 1. TiVo's profit problem was not its pricing but its SAC. The part of the old model that could have worked was its price levels.


I respectfully disagree. I believe the problem was the relationship between revenue and SAC. Simply put, because TiVo's ARPU is fairly low (w.r.t., say a cable or satellite business) and consumer resistance fairly high, it can't spend on marketing to the extent that is necessary to drive mass adoption. The new pricing plan attacks both of those problems simultaneously: it apparently decreases consumer resistance, and it allows for a higher SAC (giving the box away) while still increasing the NPV of a new sub. Thus the marketing spend can (in theory) go up. The risk is that the higher pricing and lack of a lifetime option will increase consumer resistance. TiVo, obviously, does not believe that will be the case. But, as I have said, they can always bring back lifetime if they need to.



> 2. TiVo's subscriber acquisition lagged because of the complexity of purchase, which effectively caused inefficiencies that raised SAC.


I believe your argument here is that the two-step process of purchase and activation was the major source of resistance from consumers. I am skeptical, but I have no data to back my position except my own experience, and since I am a buyer, that is not valid. (Though I will point out that when rebates are offered, sales jump significantly. If adding an extra step to the buying experience was a major impediment to purchase, one would think that the addition of this fairly complex and time-consuming step would not work so well.)

It would be interesting to know if TiVo has looked at this issue in their research. If not, and it is a source of resistance, they could modify their system. Have you considered writing to IR, Pony, or Katie Ho and asking if they've looked at the one-step vs. two-step issue?



> 3. It is not clear, because of pricing and terms, that TiVo's new plan will be any more effective than the old one.TiVo's new plan has the possibility of leading to significant profits, but the future outcome is very much at risk due to high pricing and troublesome terms, which could lead to serious failure. TiVo could have adopted a more conservative plan with a much higher likelihood of positive outcome and possibly just as lucrative.


My feeling about your plan is that it is substantially more complex that TiVo's, leading to the possibility of a lot of consumer confusion as to how much they would be paying under which option. Your plan also does not increase (and possibly actually decreases) ARPU, with the only offsetting advantage being the potential of a decrease in SAC through hoped-for improvements in marketing efficiencies from the one-step vs. two-step sales process.



> TiVo's problem has never been its subscription pricing so much as the mechanics of purchasing which have helped lead to excessive SAC. Both payment and activation were always multistep processes; ie. 1. order/pay for box, 2. pay for and activate service; 3. obtain rebate. (3 steps)


I'm keeping this in because it appears in a couple of my points above and because I want to point out that while the marketing portion of SAC can go down through marketing efficiencies, the marketing portion last year was only about 37% of SAC, the remainder being hardware cost. So there is a situation of diminishing returns in improved marketing w.r.t. SAC: double subscriptions without changing costs (pretty hard to do IMO) and you decrease SAC by 19%; doubling again only nets another 9%. Obviously worthwhile, but not huge -- the increased sub base (and, under TiVo's plan, ARPU) are the important factors.


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## Atomike (Jun 12, 2005)

Brevity is the heart of wit.

When I have 6 hours of free-time, I'll read some of the posts in this thread.


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## ChuckyBox (Oct 3, 2005)

Atomike said:


> When I have 6 hours of free-time, I'll read some of the posts in this thread.


I'll summarize for you:
"Me right. You wrong."
"Uh-uh."
"Uh-huh."
"Grrr."
"Grrr."
"Grrr."
"Uh?"
"Eh?"

Still to come:
"Nazi."
"Communist."


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## lajohn27 (Dec 29, 2003)

Chucky man...

You rock.

The humor is killer.

J


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## HDTiVo (Nov 27, 2002)

Atomike said:


> Brevity is the heart of wit.
> 
> When I have 6 hours of free-time, I'll read some of the posts in this thread.


Hey, at least you didn't have to write this crap.


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## bidger (Mar 30, 2001)

MickeS said:


> As I understand it now, though, when you buy a TiVo from their website, you choose the plan, and it's subbed when you get it right?


I ordered from the website last July and took advantage of the free 40 hr. w/ the purchase of 1 yr. or Lifetime Service. Even though I selected Lifetime when I ordered and paid for the unit, I still had to enter a promotional code when I activated online. It's possible it could have changed since then.


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## HDTiVo (Nov 27, 2002)

ChuckyBox said:


> I was responding to "negative" presentations of the situation (the Newsweek article, "TiVo is doomed" posts, etc.) by pointing out a number of significant positives that are frequently ignored or overlooked. I am well aware that there are risks and potential sources of failure for TiVo (or any company, for that matter), but I don't think informal discussions on message boards require "safe harbor" statements or a prospectus-like litany of risks.


A little conditional language is fine, ie. TiVo may have turned the corner vs. TiVo has turned the corner...



ChuckyBox said:


> I believe your argument here is that the two-step process of purchase and activation was the major source of resistance from consumers. I am skeptical, but I have no data to back my position except my own experience, and since I am a buyer, that is not valid. (Though I will point out that when rebates are offered, sales jump significantly. If adding an extra step to the buying experience was a major impediment to purchase, one would think that the addition of this fairly complex and time-consuming step would not work so well.)


Certainly rebates stimulate sales, but at what cost? The rebate is $150 (lately.) Processing rebates costs money. Dealing with irritable people waiting for or not getting their rebate costs money and leads to greater cancellations of service. Sales are much more stimulated (dollar for dollar) with a lower price because there is no hassle. (Ever been in Best Buy and seen two competing products, one with an Instant Rebate and the other with a Mail in Rebate...  ) TiVo might want $79 or $89 for the box instead of $69 to compensate for loss of Rebate Breakage, however, that may not be necessary at all because greater box sales volumes could compensate for lower average Hardware Revenue per box via more Total subscription service margins*, lower hardware cost per box (see below,) and the rebate processing and customer service cost reductions.

Anyway, I reassert my contention that it is (still at retail)/was a 3 step process both for the customer and TiVo, with associated costs and inconvenience. According to TiVo's early comments on the research, they found resistance between steps 1 & 2. The TiVo, Inc. bundle program eliminates steps 2 & 3 (is the unit pre-subed?) but introduces a new step 2 called "remember to call again in 1-3 years to get the 'best' price." 

* Service margin (%) also increases because service costs (ACPU) are on a declining trend with increasing subs.



ChuckyBox said:


> I'm keeping this in because it appears in a couple of my points above and because I want to point out that while the marketing portion of SAC can go down through marketing efficiencies, the marketing portion last year was only about 37% of SAC, the remainder being hardware cost. So there is a situation of diminishing returns in improved marketing w.r.t. SAC double subscriptions without changing costs (pretty hard to do IMO) and you decrease SAC by 19%; doubling again only nets another 9%. Obviously worthwhile, but not huge -- the increased sub base (and, under TiVo's plan, ARPU) are the important factors.


That 19% is the whole ballgame. Takes SAC from $180+ down to the $145 range. Hardware sales have some fixed costs and scale costs too, so that 19% quickly can become 25%.



ChuckyBox said:


> I respectfully disagree. I believe the problem was the relationship between revenue and SAC. Simply put, because TiVo's ARPU is fairly low (w.r.t., say a cable or satellite business) and consumer resistance fairly high, it can't spend on marketing to the extent that is necessary to drive mass adoption. The new pricing plan attacks both of those problems simultaneously it apparently decreases consumer resistance, and it allows for a higher SAC (giving the box away) while still increasing the NPV of a new sub. Thus the marketing spend can (in theory) go up. The risk is that the higher pricing and lack of a lifetime option will increase consumer resistance. TiVo, obviously, does not believe that will be the case. But, as I have said, they can always bring back lifetime if they need to.


So the relationship between ARPU and SAC is certainly where the problem is; widening the gap between ARPU and SAC is necessary. You can, for example, raise ARPU more than SAC, or lower SAC more than ARPU. I choose to keep ARPU the same and lower SAC. The reason is the high risk of changing both at once; especially raising ARPU substantially when box sales/sub adds were too low anyway.

Whether the new plan as constituted actually reduces consumer resistance enough is still unknown. I hope TiVo will be fast on its feet with any necessary changes, but they strike me as a little slow historically.



ChuckyBox said:


> My feeling about your plan is that it is substantially more complex that TiVo's, leading to the possibility of a lot of consumer confusion as to how much they would be paying under which option. Your plan also does not increase (and possibly actually decreases) ARPU, with the only offsetting advantage being the potential of a decrease in SAC through hoped-for improvements in marketing efficiencies from the one-step vs. two-step sales process.


I'd like you to say where you think it is more complex because I am sure I can adjust it to make it less complex.

The numbers in the "HDTiVo Plan" are designed to be ARPU neutral because they parallel the prior cost of ownership model. Those numbers might need modest tweaking based on more detailed internal information and research.

Don't underestimate the two to one step purchase shift, coupled with all the purchasing options. This is probably what TiVo really identified in their research: done right sales can be accelerated. That's also supported by the history of successful CE marketing.



ChuckyBox said:


> It would be interesting to know if TiVo has looked at this issue in their research. If not, and it is a source of resistance, they could modify their system. Have you considered writing to IR, Pony, or Katie Ho and asking if they've looked at the one-step vs. two-step issue?


They might think they did, but I doubt they got it right, otherwise they would not have gone the way they did. I don't think there is much successful CE marketing experience in the personnel there; I don't see it in Rogers' resume either. Marketing CE products successfully is somewhat complex and specialized.

As for contacting TiVo folks, no. I read people and companies quite well, and I don't see an openness to that. Its "all" here in public in rough form for anyone to see anyway - and we know some of those TiVo folks have seen it...


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## tenthplanet (Mar 5, 2004)

Of course there is always the question: Is Newsweek's time up? Hmmm...


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## marksman (Mar 4, 2002)

Rob Helmerichs said:


> The biggest problem with TiVo is that people who don't have it just don't get how superior it is. I have a DirecTiVo and a Time-Warner DVR for HD, and it's almost painful to use the TW DVR. I think if people knew how good TiVo really is, they'd be clamoring for their cable companies to cut a deal and get it.


I don't know if that is true. I know several people who had tivos who never drank from the tivo punch bowl, and when they got the non-tivo pvrs from Directv as upgrades or replacements for tivo units, they have no real issues with them at all.

I think people overblow the functionality that tivo provides for the average person over everyone else. TiVo has been amazingly stubborn. Take something as ridiculous as a meter to determine how much free space is left. That has been opposed tooth and nail for all kinds of bizarre reasons, yet it really should be basic functionality for any pvr, and many others have it now.

Can you record tv shows, can you schedule recordings, will it save tv shows you want to watch? that is the functionality the average person is looking for... Things like wishlists and kidszone (nice to see they mentioned that as a differing feature, it just shows how out of touch they are, who cares about that), are simply not features people want. Are they nice to have? Sure. Is anyone going to choose a more expensive product because it has them? Very unlikely.

TiVo failed to leverage its one real asset in all of this (apart from its name), and that is its software. They have continued to fluff it up and add non-core functionality (not entirely but if you look at the overall development since the series 1 most improvements have made very little difference to the core usage of the boxes), and others are catching up. The problem is people really just want the core and tivo had it 7 or 8 years ago. There should be 30 million boxes with tivo software on it out there.

I don't see the series 3 doing much to help them either. Their only hope for independant viability comes from their cable deal, and if that turns out to be another DirecTV relationship where the other guy wields all the power, it will not matter.

Clearly Cisco purchased SA with bigger plans in mind, including a potential direct entry way into the consumer marketplace. Cisco has some of the best software engineers in the world. Do you really think they will never catch up to TiVo?


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## marksman (Mar 4, 2002)

It is intersting to me that some people here seem to support the idea that stand-alone cable boxes is the future of the PVR market.

Clearly TiVo has put their eggs into this basket, and I am not sure how anyone can clearly think their way to that being the future of PVRs. That already niche market is only going to be shrinking not growing. Less people are not going to have digital cable out of all people who have cable, more will. Eventually all cable users will have digital cable.

This just seems like a very odd horse for anyone to be riding, let alone TiVo.


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## jmoak (Jun 20, 2000)

marksman said:


> Can you record tv shows, can you schedule recordings, will it save tv shows you want to watch? that is the functionality the average person is looking for...


A tivo will do that, reliably and without hassle. That seems to be the biggest problem with the other dvrs. You can schedule recordings, but many find that sometimes it'll record them, sometimes it won't. You just never know.
(check out the other dvr forums to see what I'm talking about)


marksman said:


> Do you really think they will never catch up to TiVo?


I hope they will, in the most "core usage" of the boxes at least.

You'd figure someone would have done it by now.


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## vman41 (Jun 18, 2002)

marksman said:


> It is intersting to me that some people here seem to support the idea that stand-alone cable boxes is the future of the PVR market.
> 
> Clearly TiVo has put their eggs into this basket, and I am not sure how anyone can clearly think their way to that being the future of PVRs. That already niche market is only going to be shrinking not growing. Less people are not going to have digital cable out of all people who have cable, more will. Eventually all cable users will have digital cable.


The FCC mandated cable systems support CableCard specifically so digital reception could be integrated into TVs without a separate settop box provided by the cable company. Standalone DVRs using CableCard should operate better than they do now with the kludgy 'IR blasters' controlling the cable companies STBs.


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## HDTiVo (Nov 27, 2002)

marksman said:


> It is intersting to me that some people here seem to support the idea that stand-alone cable boxes is the future of the PVR market.
> 
> Clearly TiVo has put their eggs into this basket, and I am not sure how anyone can clearly think their way to that being the future of PVRs. That already niche market is only going to be shrinking not growing. Less people are not going to have digital cable out of all people who have cable, more will. Eventually all cable users will have digital cable.
> 
> This just seems like a very odd horse for anyone to be riding, let alone TiVo.


We may be mixing terminology, so let me describe things like this:

A PVR from a cable company (Cable DVR) is a digital/HD STB with a PVR included in it.

A Series 3 TiVo PVR is an HD STB (with the addition of a Cable Card) with a PVR included in it.

So a Series 3 is an alternate way of getting a Cable HD STB w/ PVR.

So there is some market to have a PVR, at least at the rate your cable company charges. The standalone opportunity for TiVo is that plus the value of whatever features and quality it has over the cable PVR.

So TiVo's premium value in the future relies on what it can do beyond the Cable DVR's capabilities. I've described part of that opportunity as being at the center of the Home Digital Media Network; the S3 being a hybrid DMR and Digital Media Server integrating in the Vista/ViiV environment.
Where Does TiVo Belong? 
hardware vision at TiVo needs to expand 

Being part of the Vista/ViiV environment as a DMR/DMS also implies reaching beyond the cable PVR functionality for content access...
The End is Near
The S3 in Your Home Digital Media Network


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## ChuckyBox (Oct 3, 2005)

HDTiVo said:


> Anyway, I reassert my contention that it is (still at retail)/was a 3 step process both for the customer and TiVo, with associated costs and inconvenience. According to TiVo's early comments on the research, they found resistance between steps 1 & 2. The TiVo, Inc. bundle program eliminates steps 2 & 3 (is the unit pre-subed?) but introduces a new step 2 called "remember to call again in 1-3 years to get the 'best' price."


I don't think TiVo has any intention of making that a "step." My guess is that the majority of consumers will just go on paying the monthly rate, and TiVo will be perfectly happy with that. (This was the source of my comment about your plan reducing ARPU -- the automatic return to the lowest-priced service misses this added revenue.)

But I think I now see the source of some of our differences on the pricing plans. My understanding of TiVo's research is that consumers resisted the *idea* of both paying for a box _and_ paying for service. Your understanding (I believe) is that consumers resisted the *steps* involved in getting a TiVo (buy, activate, and maybe file a rebate).

Based on the new pricing plans, and TiVo's comments about their tests, it seems that the bundled pricing addresses a significant source of consumer resistance -- it is not clear how much resistance, if any, the activation step will produce under the new plan. Though I do agree that it would be nice if TiVo handled the activation step upon shipping the box to the consumer (slap the shipping label on the box, scan the customer ID from the shipping label, scan the TSN, and toss the thing in the shipping pile. The computers could then set up the person's account.)



> That 19% is the whole ballgame. Takes SAC from $180+ down to the $145 range. Hardware sales have some fixed costs and scale costs too, so that 19% quickly can become 25%.


There is no question that it is a significant number, but it does require doubling subscriptions with no increase in marketing spending. If TiVo can do that, they're home free. (Though SAC is going to go up, even under your plan, because of bigger upfront subsidies of the boxes -- which will eat up some or all of the improvements from marketing efficiencies.)



> Whether the new plan as constituted actually reduces consumer resistance enough is still unknown. I hope TiVo will be fast on its feet with any necessary changes, but they strike me as a little slow historically.


The biggest unknown I see is whether consumers who don't want a monthly payment will find the upfront options palatable. I don't know if TiVo's testing has addressed this issue. If it turns out that the upfront options don't satisfy this group of consumers, and it is a significant barrier to growth, then TiVo will have to bring back the lifetime option. But then the question is: Will the gains from that change offset the reduced ARPU?



> I'd like you to say where you think it is more complex because I am sure I can adjust it to make it less complex.


I think including the MSD substantially confuses the issues, especially for people new to TiVo -- which is the market you are trying to appeal to. Also you are offering new customers three options (two buy, one lease) each of which has a different monthly or upfront payment, and four pre-pay service options. It would be hard for me, as a consumer, to figure out which options is the "best" for me.

In contrast, if you look at TiVo's plan, it is extremely simple -- just one option (bundled box and service), then pick prepay or monthly. The amount you are paying is perfectly clear (the prepay options even have the per-month cost pre-computed for you so you can see the discount). It is very easy as a consumer to see the tradeoff between upfront/monthly and length of commitment.


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## ChuckyBox (Oct 3, 2005)

marksman said:


> Cisco has some of the best software engineers in the world. Do you really think they will never catch up to TiVo?


Ah, now Cisco's plan is becoming clear. Once they sell you the box, you have to choose one or more family members to sign up for a two-week, $4000 course to become a CCDE (Cisco Certified DVR Engineer) and be qualified to program the thing. Each feature ("Season Pass," "Wish List," etc.), also has a special $499 two-day course leading to additional certification. When someone in the household wants to see a show, they file a request with the CCDE, who programs the box to do the recording, and then sets up a time for the user to watch the playback. An additional two-day course ($499) is required for each family member who wants to use the remote control for pause, rewind, FF, etc. Software updates, phone service, etc., require a maintenance contract that costs 25% of the box cost per year.


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## HDTiVo (Nov 27, 2002)

ChuckyBox said:


> I don't think TiVo has any intention of making that a "step." My guess is that the majority of consumers will just go on paying the monthly rate, and TiVo will be perfectly happy with that. (This was the source of my comment about your plan reducing ARPU -- the automatic return to the lowest-priced service misses this added revenue.)
> 
> But I think I now see the source of some of our differences on the pricing plans. My understanding of TiVo's research is that consumers resisted the *idea* of both paying for a box _and_ paying for service. Your understanding (I believe) is that consumers resisted the *steps* involved in getting a TiVo (buy, activate, and maybe file a rebate).
> 
> Based on the new pricing plans, and TiVo's comments about their tests, it seems that the bundled pricing addresses a significant source of consumer resistance -- it is not clear how much resistance, if any, the activation step will produce under the new plan. Though I do agree that it would be nice if TiVo handled the activation step upon shipping the box to the consumer (slap the shipping label on the box, scan the customer ID from the shipping label, scan the TSN, and toss the thing in the shipping pile. The computers could then set up the person's account.)


I see it as both "steps" and "idea." Paying (pulling out the wallet/credit card) multiple times and multi-step activation. At each point, there is an opportunity for the customer to re-think the decision to subscribe.



ChuckyBox said:


> There is no question that it is a significant number, but it does require doubling subscriptions with no increase in marketing spending. If TiVo can do that, they're home free. (Though SAC is going to go up, even under your plan, because of bigger upfront subsidies of the boxes -- which will eat up some or all of the improvements from marketing efficiencies.)


Maybe the technical accounting measure of SAC would go up, I'd have to run more numbers; but I'd want to offset that with the possibility of a slightly higher Hardware Revenue per Unit number, or some other thing to keep the overall picture neutral vs. the old system. Obviously that also requires a bit of "inside TiVo" knowledge to get the figures just right.



ChuckyBox said:


> The biggest unknown I see is whether consumers who don't want a monthly payment will find the upfront options palatable. I don't know if TiVo's testing has addressed this issue. If it turns out that the upfront options don't satisfy this group of consumers, and it is a significant barrier to growth, then TiVo will have to bring back the lifetime option. But then the question is: Will the gains from that change offset the reduced ARPU?


Again, a big concern for me too.



ChuckyBox said:


> I think including the MSD substantially confuses the issues, especially for people new to TiVo -- which is the market you are trying to appeal to. Also you are offering new customers three options (two buy, one lease) each of which has a different monthly or upfront payment, and four pre-pay service options. It would be hard for me, as a consumer, to figure out which options is the "best" for me.
> 
> In contrast, if you look at TiVo's plan, it is extremely simple -- just one option (bundled box and service), then pick prepay or monthly. The amount you are paying is perfectly clear (the prepay options even have the per-month cost pre-computed for you so you can see the discount). It is very easy as a consumer to see the tradeoff between upfront/monthly and length of commitment.


I think having more options open would induce more sales by satisfying more potential buyers than it would scare off with confusion. Even if not, I'd enhance the marketing plan by segmenting my advertising to different target groups. In other words, advertise only certain price plan(s) to a particular market segment, while advertising a different set of plan(s) to another, as appropriate for each segment's tendencies.


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## TivoGeezer (Dec 3, 2003)

mike3775 said:


> If I were to get another DVR, I would get it from Comcast? Why? Because it will be cheaper than getting another Tivo.
> 
> And I showed my parents everything that Tivo can do when they asked about DVR's. When they asked how much the price was(without the lifetime option), they said ok and called Comcast to get a DVR. They don't need to transfer to PC or take it on the road, theyjust want to have something to watch when nothing is on and VOD is lacking. Thats it.
> 
> Tivo may have hurt themselves by getting rid of lifetime. Why should Tivo expect someone to get a Tivo and pay $13 a month, when they can get a DVR from cable for $5? Not everyone wants the HME features either. I rarely use them, and the only reason I do have my tivo hooked into my wireless is so that I can take the shows I recorded and store them on a couple 300 gig external hard drives to keep the tivo's from deleting programs I may want to watch.


I have a really nice Bose sound system. If I were to get another sound system, I would get a cheap boom box. Why? Because it would be cheaper than getting another Bose.

When I showed my parents how nice the Bose system was and how good the music sounded, they asked about sound systems. When they asked the price, they said ok and went and got a Sharp system from Wal-Mart. They don't need frequency response to 100KHz. They can't even hear sounds that high. They just want to play their Spike Jones Cds. That's it.

I guess all those cheap systems out there is the beginning of the end for Bose. Too bad.


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## dgh (Jul 24, 2000)

A major difference between Bose and TiVo is that the former has very effective marketing.


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## interactiveTV (Jul 2, 2000)

TivoGeezer said:


> They don't need frequency response to 100KHz. They can't even hear sounds that high.


 I hope not. Not even a dog could hear that. I guess if you were a bat you'd enjoy that kind of frequency response.

http://hypertextbook.com/facts/2003/ChrisDAmbrose.shtml
http://hypertextbook.com/facts/2003/TimCondon.shtml

Bat Rap, by Bose


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## lessd (Jan 23, 2005)

HDTiVo said:


> We may be mixing terminology, so let me describe things like this:
> 
> A PVR from a cable company (Cable DVR) is a digital/HD STB with a PVR included in it.
> 
> ...


With HD cable boxes renting their 15 hour HD DVR for about $10/month (more then the box itself) and a unlimited warranty on their box (on sight no less) Series 3 may not be such an easy sell. I am sure that over time the cable com. will increase the record time without much if any extra cost to the user. Comcast already increased my HD DVR from 10 hours to 15 hours for nothing but the time to replace the box.
S3 may have some features that will increase its value over the Cable DVR system but will it be enough. I now find it impossible to convince any friends of mine with a HD DVR cable box (from the cable co) and a HDTV to think about a TiVo. S3 as I understand it now will not have two way communication with the cable co. so that takes away On Demand and PPV that the digital cable box does now.

Am I missing something about the S3 ?

As far as the S3 being the center of the Home Digital Media Network that would assume more then one HDTV in the home, not many people will have that for some time. The S2 acts as the Home Digital Media Network center for me now as I have only one HDTV and many normal TVs


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