TiVo subs go into a crash dive

In the interest of transparency, I should tell you that I’m a longtime TiVo customer and big fan. The company’s empowering and elegant implementation of the DVR totally changed television consumption at the Villa Murrell. And with a lifetime subscription for my TiVo HD, I have a great interest in seeing all of us — the box, the service and me — live out many happy years together.

So it pains me to report that TiVo is going through a particularly rough patch. On Tuesday, the company reported a quarterly loss of $6.7 million, or 6 cents per share, and a 12 percent decrease in sales from the year previous. The earnings were about what analysts expected, the sales somewhat better. More troubling was the steep drop in subscribers. Some 314,000 people left the fold during the quarter, more than twice the number who pulled the plug in the previous quarter and the company’s worst quarterly dropoff ever. The total number of subscribers to the service, either through a TiVo box or a service like DirecTV, is down to about 2.7 million, back to the same level it was five years ago.

But TiVo is nothing if not plucky. Buffering the impact of the quarter’s numbers, the company announced it was re-entering the U.K. market with a deal to develop the middleware and interface for a co-branded line of set-top boxes from Virgin Media, the country’s largest cable operator. Calling the hook-up “substantial,” investment bank Lazard Capital Markets estimated the deal’s value at $48 million, while Kaufman Bros. analyst Todd Mitchell called it “both strategically and financially significant.” TiVo also announced a deal to supply Google with subscriber viewing data that the search sovereign can use in its GoogleTV ad platform. So, factor in the coming launch of the DirecTV TiVo HD DVR, continuing set-top box development work with Comcast and Cox, and whatever spare change the company can pick up in intellectual property fights, and maybe TiVo can make it all work out. I know I’m not alone in the rooting section.

 
 

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  • lou kaplan

    Why TiVo when I have an HD box from a provider like say Direct TV?

  • Tom Nygen

    This is a payback time for ReplayTV. In the early days there were two companies that offered technology to time shift live TV. ReplayTV had commercial skipping technology that I love. It never bucked the industry that throws ads into your face when you watch TV. Well, ReplayTV got killed by the media company. It died as a hero. In contrary, TiVo was coward and begged for support from people who force viewer to view ads. Now the bad guys are dying out (Yahoo!, TiVo) and the good guys strive (Google). I still use my ReplayTV 5000 with commercial skipping feature today, however, not so often anymore since my kids are teens now. They never had to watch commercials in the time when they were younger. Thanks ReplayTV. Who cares about TiVo. BTW, I click very often on Google ads, since these are targeted and not intrusive.

  • ynt

    …the fact that people pay, let alone pay for a device that records the rubbish coming out of the networks astonishes me. YOU should be paid to watch, not the other way around.

  • Unindicted Co-Conspirator

    There is an entire market Tivo isn’t serving. Those of us who have only broadcast TV & would like one, but aren’t stupid enough to pay Tivo’s price for one that gets all the cable channels.
    There is one from Dish that does this, but it’s overpriced & has gotten terrible reviews!

  • One reason for the decline is that video service providers (cable and satellite) are giving customers their own DVRs. Most are not as polished as TiVO but they’re “good enough.” Where TiVo could thrive in in Europe where the software on home-grown DVRs is a lot less polished. The DVR on FREE, the service in my Paris apartment is nearly useless, and even the program guide is extremely clumsy.

  • Ulfie22

    The inability to ship the DirecTV HD TiVo is a huge blunder for both companies. The DVR from DirecTV, while improved from its original clunkiness, is still awkward. It was a dark day when we had to disconnect our original DirecTV TiVo boxes in order to get access to all of the HD channels on the satellite. As soon as it is available, those TiVo units will fly out the door. In this engineering driven age, it is inconceivable that it is taking this long to make this product available.

  • John Crump

    Boy, John… that’s almost a story I could/would have written.
    Sorry you’ve gotten the dismal responses, but I figure they don’t know the marketing part of the technology’s history (and why Direct TV was ordered to pay Tivo). Maybe the Google deal will offer more than a little cash, maybe some help in an intelligent marketing/value-add programming partnership. We know there will be serious TV/web convergence in the future, and it would be nice to see projects, intelligent ones hopefully, which start leading us that way.

    Keep up the good work… You remain one of the fun, smart, non-smarmy reads on technology.

  • GRM

    I too love my TiVo. Why are subscribers leaving? I am guessing to save every bit of money and because the service is ‘free’ from Comcast and the like. Nothing I have seen works as well as TiVo.

    To address Tom’s point above, TiVo also has commercial skip. It is however an ‘undocumented feature’ so as not to upset advertizers.

  • Bazza

    Don’t forget that there are other (sometimes better) options now too. You can build a pretty grunty HTPC these days for next to nothing. If you’re running decent software, like DV Scheduler, you can schedule as good as (if not better than) a Tivo can and do plenty of other jobs a Tivo can’t, like watch catch-up content off the net and play all your favourite games. As more people get TVs with 1080 panels, this will become even more common.

  • JWS

    I also had a ReplayTV hooked up to DirecTV that got replaced with a Tivo when Replay died. The Tivo combined with the satellite receiver is far superior (there’s only one image decompression). My family uses the 30-second advance all the time, and won’t watch TV without it. We have delayed going to HD because we couldn’t stand the thought of not having a Tivo (and are completely unwilling to go to Comcast). It amazes me that the other DVRs have been unable to come close to Tivo in usability, given as long as it has been around.

  • I am a Tivo HD user of OTA signals only. I live in the country and was a previous user of the Directv/Tivo unit by Sony. When HD came via OTA, I dumped the $60/month Directv service and bought the Tivo HD. Haven’t looked back since. Sure I miss a handful of a channels, but guess what? I can get those shows online if I want to! I guess you can say that about any show these days. What many people forget is the EASE and CONVENIENCE of the Tivo unit directly attached to your TV and Antenna. And for me, no cable or Sat bills, only the $13 to Tivo.

  • curmudgeon2000

    Tivo is just an idea implemented by hardware and software.
    The hardware becomes a commodity and the software can be
    duplicated, however well or poorly, by others. History
    shows that the mass of people will eagerly sacrifice quality
    for economy, so in the long run Tivo is doomed unless they
    can create new, desirable innovations.

    I’m a little surprised that open-source solutions like
    MythTV haven’t taken a noticable slice of the pie. But
    I suspect that perhaps if some enterprising individual tried
    to start a business based on that, the entrenched interests
    would sue them out of existence.

  • Kevin

    Subscribers are leaving only because so many subscribers are product lifetime. By TIVO accounting that means they are technically no longer subscribers after four years, that’s when TIVO stops booking the revenue.

    If this is going to be the model, Tivo continues to use, it needs to update the product more frequently to entice those with product lifetime subscriptions to purchase a new Tivo. Personally, I feel as though Tivo would be far better off breaking even or profiting on hardware and not relying so much on subscription.

  • curmudgeon2000

    Tivo has other troubles, too. I’ve just discovered, through a
    relative, that AT&T’s U-verse service does not play well with
    other recording devices, including Tivo. The power saver
    feature on their cable boxes deters unattended recording.
    AT&T won’t turn the feature off, Tivo can’t or won’t issue a
    fix, and the workaround for Tivo owners is ugly. Do a web
    search on “U-verse Tivo problems” to find discussions about it.
    The content distributors clearly want consumers to use their
    own inferior DVRs, and aren’t above employing such tricks to
    force the issue.

  • @curmudgeon2000: I am a long-time Tivo fan and I got bit by that same power save “feature” on U-verse that thwarted my Tivo recording system. I was pretty frustrated with this. Then U-verse turned on the muti-room DVR recording feature — an excellent solution to my problem. This is a case where better product features prevailed; I no longer miss my Tivo.

    No doubt, Tivo has a slicker UI for DVR, but U-verse has so many more features and easy access to content. We gave our Tivo (with lifetime subscription) to friends who don’t have access to U-verse. I wish Tivo well, but they have a challenge succeeding in a market where their whole product is just another feature on competing products. I hope they can find a set of alliances that combine into a winning combination.

    While we’re on the subvject, I just watched Netflix on my brother-in-law’s new TV. WOW! — a much better experience than Netflix on a PC (even when attached to a big screen TV via HDMI). So I can see that our TV viewing options are far from settled, and may even be evolving at a faster pace.

  • curmudgeon2000

    My relative makes frequent use of a Tivo feature not offered
    on any competing DVR system: they burn DVDs of programs that
    they’ve recorded. I am not familiar with the U-verse DVR.
    Does it have wishlists? And there even some Tivo users who
    like the suggestions feature. Does U-verse have that as well?

    Tivo’s problem is that, for the masses, “good enough” will
    trump excellence.

 
 
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