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What exactly are the Tivo service fees for?

Discussion in 'TiVo Coffee House - TiVo Discussion' started by barrett14, Aug 26, 2013.

  1. barrett14

    barrett14 New Member

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    One thing I never understood about Tivo - what service are they providing that demands these high fees?

    The only thing I see them doing is providing a TV Guide to the box. The new Tivo Stream also requires a monthly fee when it does the exact same thing as Slingbox, which requires no monthly fees.

    I honestly don't have any problem paying a monthly fee as long as I feel like the service I am getting justifies it - but I just don't see it in this situation.
     
  2. jrtroo

    jrtroo User

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    There are a million threads on this. But it has been a while, so a good time for some arguing.

    Its my understanding that four main things are in the fees: Guide data, subsidy for cost of the box, software, and revenue.

    Lifetime is worth it. Just do it. :)
     
  3. jakerock

    jakerock Hey ho howdy! TCF Club

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    TiVo provides the guide data which is an ongoing cost for them (I assume). TiVo also provides SW updates for some amount of time.

    Other than that it is just how their business works. If you don't want to pay the monthly fee then buy lifetime and assume the cost of the product plus lifetime is simply the final cost of the unit. If that is too expensive then don't buy it. I personally enjoy the TiVo enough that I own three units with lifetime and have been very happy with the situation (though I'd be even happier if it were cheaper but that goes for anything I'm buying).
     
  4. barrett14

    barrett14 New Member

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    Ya I bought the lifetime with the new Roamio because to me it was still worth it, even though I feel like it is very over priced.

    I understand that software updates etc... cost money, but plenty of companies provide software updates on products that don't require fees.

    I wish that Tivo had a decent competitor... That, more than anything, would drive costs down.
     
  5. atmuscarella

    atmuscarella Active Member

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    The Stream does not require a service fee.

    The bottom line is TiVo uses service fees to make money. They have chosen a model where they don't sell the boxes for enough money to be profitable and use the service fee to compensate for that.

    If you don't like paying a monthly service fee they do allow you to pay the fee in full upfront, it is called lifetime (of the box it is bought for) service.

    When I evaluate how much a TiVo DVR cost I just use the lifetime fee to come up with a number to evaluate.
     
  6. atmuscarella

    atmuscarella Active Member

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    DVRs in general cost allot of money. If you would like to see a comparison of the 3 year costs of a 3 TV whole home system using a TiVo Roamio DVR & Mini's versus TWC in my area look here:

     
  7. WhiskeyTango

    WhiskeyTango New Member

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    Consider it a licensing fee. You are essentially leasing their software.
     
  8. mr.unnatural

    mr.unnatural Active Member

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    Ellicott...
    Guide data is free to the end user. You can download it and access it without paying for the Tivo service. Tivo does have to pay for guide data, but they recover the cost in the Tivo fee they charge to licensed subscribers. Tivo primarily charges you for licensing their software. When you activate your Tivo, you essentially turn on the software so that it allows you to use the various DVR features (i.e., the ability to record, set up season passes, use the search function, etc.).

    IIRC, most Tivos will allow you to use the tuners at no charge for viewing live TV. You should be able to activate a cablecard and use the Tivo as a HD tuner without paying for the Tivo service. You just can't record anything without paying the fee. Think of the Tivo software as freeware without all of the features available until you purchase the license key. You can use some of the features, but it's basically crippled until you pay the full fee.

    Newer Tivos are heavily subsidized by Tivo. They sell them to you cheap because they know that they will be able to recover the cost of the box by locking you into a contract, much the same way that DirecTV does it, except that DirecTV leases the hardware and doesn't sell it outright anymore (although I believe you do have the option to purchase it).
     
  9. murgatroyd

    murgatroyd Don't stop believin'

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    I won't address the other issues like the subsidy of the hardware, because people have already done that.

    You're paying for a service. Just like the water company, the electric company, the gas company, phone companies.

    Just because other people provide guide data that you can download for free somewhere else doesn't mean the guide data is "free". Someone, somewhere, has to pay for it. Servers cost money to build and run.

    Personally? I'm an old fart, and I used to record stuff with a VCR. I used to go through TV Guide or online listings and set up all my recordings by hand. You know when the timeslot changes for a show, because the network decided to move it that week? I had to keep track of all that stuff and change the recording, by hand.

    Now that I have TiVo, I'm essentially paying for an assistant to do all that work for me. I think I'm getting good value for what I pay, considering that the TiVo can find shows for me that I don't know about. That's not possible when you are setting up your recordings by hand.
     
  10. UCLABB

    UCLABB Active Member

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    An analogy would be getting an iPhone for $199. It costs your phone company a lot more than that, but they make up for the difference through their monthly fees.
     
  11. davezatz

    davezatz Funkadelic

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    Another point worth making is that it's a sliding subsidy... when you buy a Roamio Pro, TiVo is making more off of recurring or Lifetime fees than when buying the Plus or Base model. I'd say the Plus is the sweet spot in terms of cost/benefit with the option of later updating the drive. My Mini, at $250 ($100 hardware + $150 Lifetime), is indeed overpriced. But I paid it anyway.
     
  12. mr.unnatural

    mr.unnatural Active Member

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    Ellicott...
    Hey, I represent that remark.:D
     
  13. unitron

    unitron Active Member

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    The thing that makes a TiVo a TiVo is the TiVo software, and the subscription is the price to use the software.

    The hardware is the loss leader to get you to pay them to use the software.
     
  14. lessd

    lessd Active Member

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    TiVo could have just done a single price model, like when you get lifetime service, but they broke up the pricing for, IMHO, for two reasons #1 let the customer choose monthly or Lifetime and #2 it cuts down on the retail markup, if Best buy say sold a Mini for $99 they would pay TiVo about $70 for the Mini, if Best Buy had to sell the Mini for $250 they would pay TiVo about $180 for the Mini, so in one case TiVo get a gross income from a Mini of $220 in the other case TiVo only gets $180. Also tax is different in some states, in CT the tax on TiVo type of service is only 1% and 6.35% on the hardware, so if I purchase a Mini from TiVo directly with lifetime my cost with tax is only $258.85. I think it also helps us with resale as lifetime service never goes bad so one can sell your used TiVo for close to the Lifetime cost (if you have Lifetime on it).
     
  15. replaytv

    replaytv gun talk ignore list

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    I think the price for the fees or lifetime is too much, that is why I always buy used lifetime or evaluation models for cheap. Or I buy used Series 1 Tivos with lifetime activated before January 20th 2000 and transfer the lifetime to Premiere, or now to a Romeo (where forth are thee ) But I also use non lifetimed TiVos as 1/2 hour time shift machines that I leave on the two channels I usually watch for news. Then I can fast forward through the commercials and drivel about the Queen or some bus that fell off a roadway in India.
     
  16. Worf

    Worf Active Member

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    TiVo has competition. It's called the cablebox DVR which can be had for a few bucks a month. And TiVo has been hurt heavily by it - though less so since TiVo owns a number of core DVR patents.

    OTOH, given how crappy cablebox DVRs are, that tells you what you get "for free" - basically they ship something that sorta-kinda works, because the cable companies don't want to spend a penny on the software, so anyone that can provide them with the necessary customizations the cheapest get it. If it records, it's a miracle.

    But effectively, the cable companies killed 3rd party DVRs - see what happened to the ReplayTV - it didn't keep up with CableCARD and rapidly got out of date.

    And no, guide data is NOT free. If you look at third party guide data sellers (for old ReplayTV units, Windows Media Center, etc), they're charging $10+/month for the data per device. The reason is the source of the guide data does a lot of work to keep the data organized (the data often comes to the source companies (like Tribune/Zap2it or TV Guide) like the grid you see in the papers - they have to digitize the grid, cross-reference the episodes and descriptions and add in other identifiers), so they allow people to subscribe to it for a fee. It's just our existing cable fees, etc. pay for that information.

    Of course, TiVo pays a lot less because they're not doing subscriptions for a few thousand users - they're doing bulk licensing.
     
  17. mr.unnatural

    mr.unnatural Active Member

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    Ellicott...
    Tivo has lots of competitors. Every cable and satellite provider has their own DVRs. This is extremely attractive to some people because they don't have to deal with a box they own. If it breaks they just exchange it for a new one. No upfront costs to buy the hardware and the monthly fees are on a par with what Tivo charges, and sometimes slightly less. Of course, they don't have the same features as a Tivo, but these devices are aimed at customers that either don't care about the extra bells and whistles a Tivo provides or they just don't know enough about them to make an informed decision.

    Another chief competitor is the HTPC. This is geared more towards the enthusiast, but it's not the daunting device that many make it out to be. Most Tivo owners just want a device that acts as an appliance. The argument can easily be made that a well configured HTPC is exactly that. The only maintenance I perform on mine is dealing with the monthly Windows updates that Microsoft sends out as well as an occasional driver update. Other than that, there's really nothing else that I need to do to keep it running except maybe an occasional reboot, which I seldom have to do. It's every bit as reliable as the few dozen Tivos I've owned over the years.

    The best part is that a HTPC is configurable to be just about anything you want whereas a Tivo just comes with whatever it comes with. There are no monthly fees associated with a HTPC over and above what you pay for your TV service plus the cost of a cablecard rental. Guide data doesn't cost you anything and a Windows 7 or 8 license is far less expensive than Tivo's lifetime service. FWIW, Tivo is still playing catchup with features HTPC owners have enjoyed for years.

    Unfortunately, neither of the above has driven Tivo's costs down for the consumer. If anything, the lifetime fee is 4 or 5 times what it was originally and the monthly fees have gone up considerably. The hardware may be subsidized, but you're just paying for it in longer installments.
     
  18. Grakthis

    Grakthis New Member

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    We've had this conversation in about a million threads, but it just isn't. You have to keep the same box with no desire to upgrade for almost 3 years to make your money back and after that your profit is tiny, because it's a discounted 12.99 a month (how much is a payment of 12.99 worth 3 years from now?). No one in finance would advise you to take that bet. Which is why TiVo sets the price where they do.
     
  19. atmuscarella

    atmuscarella Active Member

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    Worrying about the time value of money right now is a waist of time for most people and it is not 3 years before you are head with lifetime it is only 31 months for people getting MSD.

    If you like paying monthly please do so, it helps TiVo be more profitable and helps assure they will be around a long time to keep providing me my lifetime service, which has long ago reduced the cost of service on all my units to significantly below the cost of having actually paid monthly on them.
     
  20. Grakthis

    Grakthis New Member

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    In that case, give me 10G right now and I'll give it back to you in 3 years. Since TVM doesn't matter, right?

    31 months is over 2.5 years and I said "almost 3 years." Don't be a pedant. No one likes a pedant.

    edit: just to be clear, this is not a debate. It is absolutely factual that the average buyer WILL NOT benefit from a lifetime on a TiVo box. Even the average buyer who is active on this forum will not.
     

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