"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
Tivo would only be 'bold' if their Premier product had been delivered on time and COMPLETE with the $99 price tag from the beginning. However, a latent price drop now is hardly a sign of brilliance. It has taken Tivo's dense management team nearly a year to admit that they have been infuriating existing customers with ridiculous upgrade costs, and continuing to scare new customers away with unreasonable up-front equipment costs.
This even more unreasonable $240/year subscription cost is not going to be perceived the same way as a $99 Blu-Ray player that doesn't cost another $1000 to operate over the next four years. For that money, the Tivo service has to deliver at par or better than MSO's DVR's, AND overcome all of the advantages of Internet-based media services. Unfortunately, they have proved that they are not up to the task.
Tivo management has been miserably slow to execute, as demonstrated by their failure to complete their DirecTivo project, and they have failed to respond to customer's demands for functionality. That coupled with their failure to deliver the new Premier platform on time and releasing it while still so woefully buggy and incomplete is proof of a desperate and incompetent management team.
Now other brands and direct Internet-based content subscriptions have passed Tivo by with more innovation, better customer cost-of-ownership, and better media access options for customers, making the Tivo brand less relevant with each passing month.
The substantial loss of subscribers for a company that is still losing money is the beginning of the end for Tivo as an independent company unless they have a break-through product update that they have been hiding from everyone.