Lifetime Pricing Thoughts?

Discussion in 'TiVo Coffee House - TiVo Discussion' started by filovirus, Aug 26, 2015.

  1. Aug 26, 2015 #1 of 107
    filovirus

    filovirus Member

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    When I bought two premieres back in 2012, I paid $399 on the plsr code even though I was a new customer. Tivo customers who buy lifetime service are fiscally savvy to recognize the benefits, while most likely don't recognize the benefit over time or cannot afford the lump some, opting for a monthly fee.

    When the OTA came out, Tivo was overly optimistic wanting $15 dollars a month with no lifetime option. Maybe they felt that cord cutters had extra cable cash to afford the fee.

    We have seen Tivo drop the lifetime fees from the mini. They did the special promotions with discounted lifetime and monthly service fees that produced eBay buying services.

    Now they are charging $249 for lifetime on the OTA/Refurb Roamio.

    Does Tivo really think the Bolt has a chance (outside the Tivo loyals who can amortize) if they start cranking their lifetime/monthly service back up into stratosphere. Seems like the $249 lifetime price point is one that could help their new line of product, especially any OTA models. They need a strong affordable OTA option going forward!

    Thoughts? I for one hope Tivo can become a popular brand again and survive the cord cutting revolution while continuing to support those with cable.
     
    Last edited: Aug 26, 2015
  2. Aug 26, 2015 #2 of 107
    Chuck_IV

    Chuck_IV Active Member

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    Part of the issue for Tivo is that the cable providers boxes are becoming more sophisticated(minus a few providers) and more similar in function to what Tivo can do. So people are less inclined to want to pay the initial $200+(minus some good deals but maybe more if you want additional TV's covered) equipment cost and then a pretty hefty monthly fee(compared to a cable box fee) or an even heftier lifetime fee, that also requires an additional warranty purchase if you want to have protection like a cable box (just run to the cable office and get a new one).

    I think Tivo needs to go with a $9.99 monthly fee for the main boxes, while still keeping the minis free and offer a $249 lifetime, all the time. Even then, the initial outlay of cash needed will always be a deterent.
     
  3. Aug 26, 2015 #3 of 107
    filovirus

    filovirus Member

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    Agreed, the $249 price point for lifetime is much easier to swallow for new and upgrading customers.
     
  4. Aug 26, 2015 #4 of 107
    Thunderclap

    Thunderclap Member

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    I agree with everything said here, but I think they also need to go the Exclusivity route. I personally hate exclusivity, but that seems to be how things are going. They also need to integrate all the streaming stuff and Opera Store better. It should all be unified as one UI and not bouncing all over the place.
     
  5. Aug 26, 2015 #5 of 107
    fcfc2

    fcfc2 Well-Known Member

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    Hi,
    From my perspective, the only Tivo worth having needs lifetime service. I am a fan of Tivo but on occasions when I have suggested Tivos to friends and family, the conversation usually goes silent when I mention $499 as the lifetime service cost and that it will often be in the $1000+ range for just the base DVR and one or two minis, they look at me like I have lost my mind to even suggest such a thing. Then, if I force the conversation and someone asks about the full warranty being only 90 days, they are absolutely certain that I have been smoking something. Even if I try to explain the longer term benefits, i.e., payback being approximately 2-3 years, they are so put off by what they perceive as an extremely high initial investment with a really poor warranty, that the conversation has ended and they are looking to change the topic.
    It also makes no sense to give an existing customer lifetime service for $399 but charge a new customer $499. They should be trying to attract new customers, you would think, not make it harder to get them on board.
    The fixed price for the lifetime minis was a smart move and I suspect successful financial move. Lowering the lifetime service for the Roamios dramatically is the only way to get more new retail customers IMO.
     
  6. Aug 26, 2015 #6 of 107
    OrangeTurtle

    OrangeTurtle Member

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    I actually think there's a good chance Tivo will be lowering the lifetime price point- perhaps not as low as the current $249- but much lower than the previous number- if they are going to hope for a mass adoption of the new "bolt."
     
  7. Aug 26, 2015 #7 of 107
    tarheelblue32

    tarheelblue32 Well-Known Member

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    TiVo is in a tough spot. The size of the market for retail DVRs doesn't seem to be large enough for them to reach profitability. If they lower prices, it will probably increase demand, but it might not enough to offset the lost revenue of lowering prices. TiVo's future, if it has a future, is with MSO partners and OTA DVRs catering to cordcutters. Once CableCards go the way of the dinosaur, retail cable DVRs may disappear with them.
     
  8. Aug 26, 2015 #8 of 107
    Chuck_IV

    Chuck_IV Active Member

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    To add to this, I think another problem is that people are less inclined to stay with one carrier for the long haul, like they used to. With the providers starting to equal up on HD and content, those "new customer" deals become very tempting.

    I was with Directv for 16 years, not because of the price, but on quantity of HD. For years, Charter didn't come close. However, since Charter went all digital and Directv has become a bit stagnant at adding any new HD, Charter now has as many, if not MORE HD channels than Directv. The topper is, Charter's triple play price is saving me HUGE amounts for a least a year, with no contract.

    After a year or less/more, if I feel I'm not getting the value anymore, I'll jump somewhere else(I have couple other options) since those options are now about equal on content. With this mentality, is it even worth it to buy a lifetime sub? Yes the resale value is higher, but at the same time, many people don't think this way. They just think of dropping the boxes in the closet in favor of the next provider, if that new provider is say satellite or U-verse.
     
  9. Aug 26, 2015 #9 of 107
    thefisch

    thefisch Member

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    It would be interesting to know how many customers they have on lifetime versus monthly/annual fees. Considering the cable company only offers a monthly fee option without an upfront equipment cost (besides perhaps an install fee), I would think that monthly is the core offering that tivo focuses on. Lifetime is an option than can be priced as an incentive for loyal customers or to move product like we are seeing with the current sales. Most people focus on the monthly payment, not the purchase price.
     
  10. Aug 26, 2015 #10 of 107
    tarheelblue32

    tarheelblue32 Well-Known Member

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    According to TiVo's latest quarterly report, 45% of their retail subscribers pay recurring fees, which means that 55% of current active retail subs are lifetime. I'm pretty sure that this number also includes Minis.

    http://investor.tivo.com/phoenix.zhtml?c=106292&p=quarterlyearnings
     
  11. Aug 26, 2015 #11 of 107
    Dan203

    Dan203 Super Moderator Staff Member TCF Club

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    So those reoccurring fees could be anything from $5/mo for a Mini to $20/mo for one of those deals that included the hardware.
     
  12. Aug 26, 2015 #12 of 107
    tarheelblue32

    tarheelblue32 Well-Known Member

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    Correct, and I think it also includes any Minis that have lifetime service, even the free lifetime service that all Minis now come with.
     
  13. Aug 26, 2015 #13 of 107
    thefisch

    thefisch Member

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    Thanks for the link. It does say the mini is counted as a sub and is about 10% of the subs. You can see recurring fees used to be 50-52% and has dropped to 45% which may be a result of the shift of mini's to lifetime.
     
  14. Aug 27, 2015 #14 of 107
    JerryAC

    JerryAC Member

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    Even at $249.99, the lifetime on a refurb Roamio is hard for me to justify. A $300 entry point is pretty high for being able to record programming on the 26 channels I receive OTA. Also for me, the difference between $14.99 and the $12.99 MSD I get on my refurb Roamio service is a huge psychological difference. Add the warranty benefit of monthly and take away the risk of losing my lifetime service fee when my box dies prematurely, the 20 month pay back doesn't look so great.

    In 20 months, I suspect the delivery technology for streaming will be improved in my area to allow me to move onto something better than the Roamio.
     
  15. Aug 27, 2015 #15 of 107
    thefisch

    thefisch Member

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    I agree that everyone's situation is different. I don't see myself going off cable anytime soon and we need to record so I am not worried about changes in streaming technology.

    But if I were just comparing monthly to lifetime, I would add the cost of an extended warranty if you are bringing the continual care for monthly into the equation. So it's $250 plus $40 for 3 years of coverage - that's a 19-22 month breakeven depending on monthly being $15 or $13. And then you would still have another 14+ months of warranty coverage already paid for and the inherent resale value of lifetime. You could argue even if you plan to keep a tivo for 1 year it will cost you less than $150 for annual service if the lifetime adds at least $100 to the resale value of the unit. And I think it does.
     
  16. Aug 27, 2015 #16 of 107
    ncbill

    ncbill Well-Known Member TCF Club

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    And now there are cable bundles which include equipment, so subscribers don't see the $25/month a cable company HD DVR often costs.

    E.g., dad wants everything so I'm getting ready to switch him to a $200/month TimeWarner bundle that includes all the premium channels, plus two whole-house 6-tuner DVRs, fastest internet (50 down now, 300 by the end of the year), & unlimited home phone.

    I had a CableCard with an old lifetime TivoHD on his account, but he's more used to the cable company software, so I'll return the CableCard & tuning adapter & sell the TivoHD.

     
  17. Aug 27, 2015 #17 of 107
    Dan203

    Dan203 Super Moderator Staff Member TCF Club

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    Does he need two 6 tuner DVRs? Usually 1 with a couple of the extenders is enough. Unless he's married and wants his/hers, that I understand as we have the same thing. Don't need 12 tuners, but having our recordings separated is nice.
     
  18. Aug 27, 2015 #18 of 107
    TazExprez

    TazExprez Member

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    Sometimes you need to have 2 DVR boxes. With Verizon Quantum TV, you need 2 VMS1100 DVR boxes if you have more than 6 TVs. I have 8, so I had to have 2. I haven't returned my Verizon equipment yet, so I actually have 4 DVRs right now, with 20 tuners. This is beyond ridiculous, but I will soon be down to 8 tuners.
     
  19. Aug 27, 2015 #19 of 107
    thefisch

    thefisch Member

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    Even though I am on a bundle they still break down the equipment cost so I could return it and save the $$. Of course that varies by provider I would imagine.
     
  20. Aug 27, 2015 #20 of 107
    ej42137

    ej42137 Well-Known Member

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    In 20 months, if you don't spent the $249.99 now you'll replace your Roamio with an Acme Streamer. If you spend it upfront, for the same total outlay you'll have a working Roamio and an Acme Streamer. A Roamio with lifetime will be salable at that point if you no longer find it useful.

    A warranty you pay for (as opposed to one included in the purchase price) is the wrong end of a bad bet, even in this case. Like other forms of gambling, you might win a time or two, but if you keep playing you'll lose money.
     

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