Which division of TiVo is most profitable?

Discussion in 'TiVo Coffee House - TiVo Discussion' started by Pacomartin, Dec 27, 2014.

  1. Pacomartin

    Pacomartin Member

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    I think as we all know that Hardware is the loss leader, and the attempt is simply to break even. There was a small (3.5%) drop in hardware sales.
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    But in comparison to last year, service costs went up 27% while revenue service revenue only went up 7%.

    Average TiVo-Owned subscriptions per month 930K 974K
    TiVo-Owned ARPU per month $7.82 $8.03

    So they lost 44K subscription over last year, and the Average Revenue Per Unit dropped 21 cents. The decrease in TiVo-Owned ARPU per month for the three months ended October 31, 2014 as compared to the same prior year period was due primarily to a percentage increase in sales of service for TiVo Mini, which have much lower average revenues than DVRs.

    While the above quote is true, the company probably makes more revenue with monthly payments, their costs go up as well. The monthly payments are only 20% of service revenues, as the rest comes from lump sum lifetime, the cable companies that use TiVo and Media services. So it is hardly a make or break issue for the company.
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    But the Technology department showed meteoric growth and reduced costs.

    2014 2013 (first 9 months only)
    $76,656 $79,487 Hardware revenues -3.56%
    $70,464 $73,470 Hardware Cost -4.09%
    $6,192 $6,017 Hardware Revenue minus Cost 2.91%

    $109,509 $102,518 Service revenues 6.82%
    $42,570 $33,446 Service Cost 27.28%
    $66,939 $69,072 Service Revenue minus Cost -3.09%

    $151,182 $117,914 Technology revenues 28.21%
    $16,780 $21,190 Technology Cost -20.81%
    $134,402 $96,724 Technology Revenue minus Cost 38.95%


    Technology revenues for the nine months ended October 31, 2014 increased by $33.3 million, as compared to the same prior year periods primarily due to the settlement and license agreements with Verizon and Google/Motorola Mobility and Cisco, additional licensing revenues in excess of contractual minimums, and to a lesser extent the timing of revenue recognition related to various technology related projects.

    Revenue and cash from the contractual minimums do not include any additional revenues from our AT&T agreement .
     
  2. tarheelblue32

    tarheelblue32 Well-Known Member

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    The "technology revenue" is basically the patent litigation settlement money. It will almost completely dry up in the second half of 2018.
     
  3. Pacomartin

    Pacomartin Member

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    Thanks, good to know.

    There are no sales numbers per units posted (Roamio, Plus, mini, stream). But there is a statement that they now have over 4 million subscribers at MSO's compared to under 1 million private subscribers. I am curious how many of each king of unit they sell.

    No analysis on monthly vs lump sum subscription (i.e. how much money does the average DVR generate in month to month ; is it over $500?). Presumably since there is nothing to repossess (like a car) costs are not that high.

    I did notice that Best Buy was requiring a one year minimum on the Roamio OTA. So buying one for spare parts is no longer possible as $50+12*$15=$230 is more than the $200 to purchase a new Roamio.
     
  4. shwru980r

    shwru980r Well-Known Member

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    That's 46% of revenue that's going to disappear in less than 3 years. Doesn't sound good.
     
  5. Dan203

    Dan203 Super Moderator Staff Member TCF Club

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    A good chunk of those "subscribers" are likely Minis. There is a reason Minis require a subscription, and a reason they don't distinguish them. It's a way to get their retail numbers up. Even now a Mini gets a free "lifetime subscription", rather then simply requiring no subscription at all like the standalone Stream, because they want to count them as subs.

    I believe the OTA requires a 2 year commitment, not 1. Although I think the early termination fee is less then the total of all 2 years of service. Although one user figured out that if you buy an OTA and then cancel the sub within the first 30 days you get to keep the hardware without ever paying for the sub or the early termination fee.
     
  6. replaytv

    replaytv gun talk ignore list

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    I bought a Tivo OTA at Bestbuy a couple of months ago and didn't have to get a subscription at the same time, and I don't see anywhere on the Bestbuy site that you have to buy a subscription when you buy a OTA. So you could still buy one for 'spare parts' as far as I can see, and never have to sign up for a monthly subscription.
     
  7. Dan203

    Dan203 Super Moderator Staff Member TCF Club

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    What "spare parts" could an OTA provide though? The power supply is external and only costs $6 from TiVo and you can drop any drive into the box and it will work. You can't swap the mobo as it contains the TSN. So what do you get? A case and a couple of fans?
     
  8. HarperVision

    HarperVision TiVo's Italian Cuz!

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    Remote, Hard Drive, PS and the case I guess.
     
  9. Pacomartin

    Pacomartin Member

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    2014 (first 9 months)
    $76,656 22.7% Hardware
    $109,509 32.5% Service
    $151,182 44.8% Technology
    $337,347

    2013 (first 9 months)
    $79,487 23.6% Hardware
    $102,518 30.4% Service
    $117,914 35.0% Technology
    $299,919

    I don't think the previous post meant to imply that the entire Tech Division would vanish in 2018, but that the settlement of lawsuits was responsible for the $33 million increase in revenue. That increase would vanish by 2018. So it is more like 10% of totall revenue
     
  10. Pacomartin

    Pacomartin Member

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    I personally don't see that it is a super bargain for spare parts, but if enough things failed then you might make out at $50.

    I did think it was clever to have a box loaded with keepers (like exercise and yoga videos), and to have the ability to do "trick plays" with 4 tuners and live TV. I assume ReplayTV gets lots of live HD channels with his antenna (I only get PBS).

    It is possible that the corporation added a 1 year minimum only recently.
     
  11. tarheelblue32

    tarheelblue32 Well-Known Member

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    The Roamio remote alone sells on TiVo's website for $30, and the hard drive is probably worth at least $50. If you need either of those, spending $50 for an OTA to get it and getting either a spare hard drive or spare remote is a decent idea.
     
  12. tarheelblue32

    tarheelblue32 Well-Known Member

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    TiVo's Technology Revenue Projections:

    Nov 1, 2014 to Jan 31, 2015: $ 42,532,000

    Feb 1, 2015 to Jan 31, 2016: $ 171,563,000
    Feb 1, 2016 to Jan 31, 2017: $ 173,129,000
    Feb 1, 2017 to Jan 31, 2018: $ 174,411,000
    Feb 1, 2018 to Jan 31, 2019: $ 88,629,000

    Feb 1, 2019 to Jan 31, 2024: $ 8,193,000

    Total: $ 658,457,000
     
  13. Pacomartin

    Pacomartin Member

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    Wow, is that correct? Only $8m for 5 years?
     
  14. Pacomartin

    Pacomartin Member

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    I suppose you are correct. If you need a $30 remote, then why not buy a whole machine for $50 as a reasonable hedge against future failures.

    I meant if nothing is wrong, it seems silly to buy a machine whose parts may not be worth much in two years just to have backups.
     
  15. tarheelblue32

    tarheelblue32 Well-Known Member

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    Yep. The patent settlement money mostly runs out half-way through 2018, and that is all that their "technology revenue" really is.

    You can see it for yourself at the very end of their most recent quarterly statement:

    http://phx.corporate-ir.net/Externa...9NTYyMjczfENoaWxkSUQ9MjYyMDI3fFR5cGU9MQ==&t=1

    Note: I adjusted the dates to be actual calendar dates, not the fiscal years that TiVo uses.
     
  16. replaytv

    replaytv gun talk ignore list

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    I have 6 PBS channels that I get on antenna TV. I only watch 4 of them. One channel (12.3 MGZ) has a lot of international news that I like to watch. And then 6.1 has business news and BBC news among others.

    When you buy the Roamio OTA, Bestbuy still doesn't require that you sign up for the subscription when buying it, they just mention it is required to sign up to use the box as designed.

    Unknowing people are paying over $50 on eBay for OTA Roamios right now, but who knows if they will still be doing that years from now if one buys one for parts and then doesn't need it. So possibly you could buy one for $55 and sell it for more on eBay the next day. Even though BestBuy has them brand new for $50!
    http://www.ebay.com/itm/New-TiVo-Ro...DVRs_Hard_Drive_Recorders&hash=item19f81ae6f4
     
  17. tarheelblue32

    tarheelblue32 Well-Known Member

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    And people are trying to sell the OTA on Amazon for around $100. Maybe this means TiVo underpriced them.

    http://www.amazon.com/TiVo-TCD84651...NNRO/ref=sr_1_4?ie=UTF8&qid=1419871242&sr=8-4
     
  18. HarperVision

    HarperVision TiVo's Italian Cuz!

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  19. Dan203

    Dan203 Super Moderator Staff Member TCF Club

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    They're still hard to find. I think those people on Amazon are trying to take advantage of that. If TiVo sold them on their website, or allowed Amazon to sell them themselves, then those people would go away. I wonder if they'll even continue to sell them after the BestBuy exclusive ends, or if they're just an experiment and will be pulled once the current supply is depleted?
     
  20. HarperVision

    HarperVision TiVo's Italian Cuz!

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    Oh, in that case I saw one at the Best Buy here near my moms the other day. Wonder if I should grab it and sell on Amazon?
     

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