TiVo: $99 Premiere DVR Revving Retail
TiVo Inc. (Nasdaq: TIVO)'s gamble of slashing the price of its Premiere DVR by US$200 is paying off in brisk sales of the high-end set-top in retail outlets, CEO Tom Rogers said Tuesday.
"Certainly based on the feedback that we’ve gotten it appears promising," Rogers told analysts on TiVo's third-quarter earnings call, predicting that the company would gain more subscribers from sales of standalone TiVo receivers during the fourth quarter.
TiVo had been charging $299 for Premiere, a DVR that integrates broadband video content. Under the holiday pricing scheme, monthly subscription prices for the DVR will increase from $12.99 to $20. (See New TiVo DVRs Built for Web & Cable Content and TiVo Building tru2way Version of New Interface.)
Rogers wouldn't rule out extending the pricing strategy beyond the holiday season. While TiVo said that the steep hardware discounts could take a $10 million toll on earnings during the fourth quarter, Rogers was confident that the strategy would drive an increase in average revenue per subscriber.
TiVo could use a jolt in subscribers. It lost 112,000 of them during the third quarter, a total comprising a decrease of 45,000 TiVo-owned subscribers and a drop of 67,000 subscribers through partnerships with pay-TV providers. TiVo now counts 2.27 million subscribers. (See TiVo Posts Q3.)
Rogers said TiVo is driving subscriber growth through a distribution deal with RCN Corp. , and that it expects to see more growth in 2011 through its deals with DirecTV Group Inc. (NYSE: DTV), Cox Communications Inc. , and Suddenlink Communications , as well as European pay-TV firms such as Virgin Media Inc. (Nasdaq: VMED) in the UK, ONO in Spain, and Canal Digital in Scandinavia.
TiVo has also seen “significant interest” from small and mid-sized US MSOs, Rogers added. (See TiVo Covers Its Cable Bases , Cox, TiVo Strike a DVR Deal and Suddenlink Boxes Up TiVo Deal and RCN to Expand TiVo 'Premiere' Rollout.)
Also worth noting from TiVo’s earnings call:
— Steve Donohue, Special to