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TiVo Softens Q3 Loss

30 Nov, 2005 By: Erik Gruenwedel

Digital video recording pioneer TiVo Inc. posted a third quarter (ended Oct. 31) loss of $14.2 million compared to losses of $26.4 million during the same period last year.

Revenues for the quarter increased 52 percent to $43.2 million compared to $28.4 million last year.

Subscriber acquisition costs increased to $308, from $275 last year.

Alviso, Calif.-based TiVo said it is pursuing more than 36 million U.S. homes with analog cable service in addition to international forays into Taiwan to offset rising generic DVR use. The company said domestic over-the-air TV viewers and analog cable subscribers represent 53 percent of its user base.

The company reported total subscriptions of 4.008 million, including 379,000 new members via its association with satellite provider DirecTV. TiVo generated 92,000 new members on its own compared to 119,000 members last year.

CEO Tom Rogers, in an investor call, said the service would implement online marketing efforts aimed at educating consumers on the merits of TiVo.

“People didn't really get why TiVo was something they needed to subscribe to,” said Rogers.

He said the service has begun offering set-top boxes for free with higher monthly charges and full-year contracts in select test markets. Studies had suggested that potential subscribers were turned off by the $49.99 set-top box charge.

“A monthly only fee is testing better than an upfront box fee,” Rogers said.

On Monday TiVo announced it was partnering with select advertising agencies to allow subscribers beginning next year the ability to search for targeted advertising on demand.

Investors weren't impressed as TiVo shares closed Tuesday down nearly 10 percent to $5.18 per share.

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