Has Tivo ever changed their price in the past?

Discussion in 'TiVo Series3 HDTV DVRs' started by mikesown, Sep 23, 2007.

  1. mikesown

    mikesown New Member

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    I want a Tivo HD badly. The problem is, it's so expensive. Yeah, I know it's a premium product and all, but I just can't see spending $299 up front and signing a contract for one year to get a $16.95 per month charge. From my CableCo, I can get a (crappy) DVR for no money down, no contract, and $10 per month.

    My question is this: Has Tivo ever changed(decreased, preferably) their service charge? If so, is it likely they'll do it again? $299.00 for the initial box seems reasonable(considering you own it), but $16 a month ON TOP of that seems nothing short of ridiculous to me. So, has Tivo ever changed their monthly fees?
     
  2. AbMagFab

    AbMagFab What happened, TiVo?

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    Sign up for three years and get $8.95-$12.95/month (I think this is still true, even for the first box). And then all additional boxes are $6.95/month. You can pay monthly, don't need to pay the three years up front.

    (And to answer your question, yes they have changed their monthly fees, but mostly to make it so you have to commit longer to get the better price. They have never decreased them, and only increased them for shorter time frames.)
     
  3. stream

    stream New Member

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    San...
    When I got my Series 2 (6 years ago), I went with the lifetime subscription (great decision! :D ), and I remember shortly thereafter, TiVo raised the monthly price (and, I believe, the lifetime as well)--so they have raised prices in the past.
     
  4. stream

    stream New Member

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    San...
    With Comcast, in my area, their HD DVR is $11.95/month. If you return it and get a TiVo, they then charge you $7/month for HD service. Even with the TiVo multi-box 3 year commit discounted price ($6.95/month), you'll pay $13.95 total for TiVo + HD service, vs. $11.95 for their (crappy) HD DVR. On top of having to buy the TiVo. I'm a big TiVo fan (have been for 6 years), but it's no surprise that they have single digit market share.
     
  5. dswallow

    dswallow Save the ModeratŠ¾r TCF Club

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    The $7/month HD charge with Comcast is a supplemental charge for equipment rental and should not be on your bill for programming.
     
  6. AbMagFab

    AbMagFab What happened, TiVo?

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    Wow, you have a great point. Paying +$2/month for far superior service and product is just crazy. Tivo should pack it up now.
     
  7. mikesown

    mikesown New Member

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    You're missing the initial investment. A Tivo HD is going to run you around $260. That's around 20 months of DVR payments to comcast.

    I have no problem paying for a box up front, but it better be cheap in the long run. I think spending $250 on a box should net you maybe $5 a month for premium guide data, software updates, etc.

    On the other hand, I'm willing to pay $16 a month if it means that I get the box for free(even if I'm renting it).

    Either of those scenarios is more than reasonable. But a large up front payment AND high monthly fees is not.
     
  8. qili

    qili New Member

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    what's the chance of TiVo being there in three years?

    I would put it < 1/3.
     
  9. bicker

    bicker bUU

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    I think it is very likely that SOMETHING will be there three years from now. It might not be TiVo, and there might be some changes to the offering associated with the normal passage of time, but it probably won't be a doorstop.
     
  10. JacksTiVo

    JacksTiVo TiVo User since 2001

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    Although we all do it, i.e. compare costs of cable company DVR's versus the TiVo service and unit price, you are really comparing apples and oranges. Why? A cable company DVR is a fancy replacement for a VCR (remember them?). A TiVo unit with its subscription service is a home media entertainment system.
    My son-in-law, an owner of a satellite company DVR, recently was watching me use the various features (especially the networking functions) of my TiVo and remarked that he wished his DVR could do them. My response: "TiVo is an entertainment service, not just a DVR". You'll notice that TiVo is now gearing their advertising to promote the multiple functions of their units/service subscription.
     
  11. MickeS

    MickeS Active Member

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    The Service or the Company?

    The service will be there, guaranteed. The company... I'd say a 90% chance.
     
  12. qili

    qili New Member

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    TiVo at a glance.

    I went through their latest 10Q and here are some interesting data points, in no particular order:

    a) significant profits on subsription offset by losses on hardware: for the first 6 months of 2007, they had subscription revenu of $107 million. the cost to service the subscribers is $20MM. so the mark-up on the service contract is 500%.

    However, they sold $8.5 million of hardware in that period, with a hardware cost of $39MM. That is, that $299 THD really costs them 5x more to make.

    b) they are adding subscribers but at an ever slower path. For just TiVo-owned subscribers, they were picking up about 50K subscribers a quarter in 2006. that number has gone to 1K in 1Q07 and a net loss of 19K subscribers in 2Q07.

    Looks like they were losing about 40-50K subscribers per quarter last year and now 50-60K subscribers / quarter in the last three quarters.

    Out of about 1.7m Tivo-owned subscribers, that's a churn-rate of 3-4%. Not bad.

    c) subscriber acquisition costs have accelerated. It used to cost them $200 to acquire a customer (hardware subsidies, rebates, etc.). that figure has exploded to $250 in 1Q07 and $750 in 2Q07. S3 hitting them?

    d) seasonality: they pick up the most customers during the christmas season. usually at around 200K in that quarter, presummably on various promotions.

    however, mgmt suggested that they are going to cut on rebates and instead use the money on promoting Tivo services (ads, etc.).

    e) directivo vs. tivo profitability: tivo charges about $10 per customer for its owned subscribers. it charges about $1 per customer for a directivo customer. No wonder they have to quit that business.

    f) S2 write-off: due to faster than expected decline in S2 sales, TiVo took a $11 million charge to write off its S2 inventory. It also took a $3 million charge with a vendor in exchange for future advertising. so someone is sitting on 150K of S2 units (150K*200=$3 million). who's that?

    g) liquidity: TiVo is sitting on $130 million of cash or investments. it also has $120 million of deferred revenue where it has collected fees from customers but have yet to provide services - anyone other than month-to-monthers.

    they burned about $40 million of cash in 1Q07 but picked up about $25 million cash in the 2nd quarter (boosted by S3 subscribers?).

    if I were an investor in Tivo, I would be concerned about how long they can keep funding their operations.
     
  13. qili

    qili New Member

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    I am reasonably sure that there is a fairly significant market for such a "fancy VCR".

    that actually represented the biggest chance for Tivo, something they have failed to deliver.

    TiVo is uniquely positioned to be the gateway to this digital entertainment. you can purchase digital content (CD, albums, DVD, PPV movies, TV shows, news cast) via your TiVo. Tivo could have worked with Apple to be the hardware front of an iTunes based distribution system, or an IPTV platform that competes / compliments SDV.

    for all their time, unfortunately, they couldn't make up their mind as to how they wanted to play the market. in the mean time, they have gone from the mkt leader to one of the also-runs.
     
  14. Gregor

    Gregor save the princess save the world TCF Club

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    And what do you base this on?
     
  15. stream

    stream New Member

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    San...
    That's what I thought as well. I know Comcast has differing policies/pricing by geography. In my area, if you have a TiVo HD w/ M-card, on top of the basic & digital service charges, they charge $7/month for HD service. I called back a few times and spoke to different people, and they all said the same thing. The $7 is for HD service--which includes either a non-DVR HD STB or one cable card (if you get 2 single stream cards, it's something like $2 for a second single stream card).
     
  16. stream

    stream New Member

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    San...
    I never said it was just crazy. ;) And you're forgetting about the $300 TiVo purchase price.

    As I said, I've been a big TiVo fan for 6 years. But the market share numbers are what they are, and for the average person, getting a DVR for $11.95/month with no initial investment seems like a good choice, vs. spending $300 up front for a TiVo, then paying $13.95/month (or more if you don't get the multiple box discount). I agree the TiVo is vastly superior to the Moto box & Comcast interface, but the lion's share of consumers choose the cable company provided DVR. That was my point.
     
  17. qili

    qili New Member

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    Tivo is like a ferrari: far better than its competition.

    Unfortunately, not many people care about the performance that much to justify the incremental economics needed to acquire that Ferrari vs. a Ford.

    constrained optimality, as economists would call it, forces all of us to purchase, willingly and optimally may I add, a suboptimal product / service.
     
  18. qili

    qili New Member

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    the same crystal ball that told you otherwise.
     
  19. dswallow

    dswallow Save the ModeratŠ¾r TCF Club

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    Do you have a copy of their price list to verify the claim? Have you tried writing a letter to Comcast's corporate offices in Philadelphia? There's so many markets where it's clearly an equipment upcharge I'd still question it no matter how many people in my local franchise claimed it was otherwise. Can't hurt. :)
     
  20. AbMagFab

    AbMagFab What happened, TiVo?

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