TiVo's new pricing includes box, drops lifetime plan
By Marc Perton 
posted March 8th 2006 4:46PM
posted March 8th 2006 4:46PM
As expected, TiVo has revised its
pricing plans to include the purchase of the TiVo box as part of the monthly fee. New pricing schemes include a
one-year plan at $19.95 per month, a two-year $18.95-per-month plan and a three-year $16.95 plan. All plans include an
80GB Series 2 TiVo box, and discounts are available for customers who pre-pay (i.e., a prepaid three-year plan is $469,
vs. $610.20 on the monthly plan). TiVo had earlier experimented with a similar
all-in-one plan at a somewhat lower price: the one-year plan was $16.95 per month, including a 40-hour TiVo box. TiVo
has also quietly dropped its $299 lifetime service plan, though current users who signed up for that plan won't be
affected. [Via PVRWire]
#49: Huh? We (TiVo subscribers) weren't interested in helping TiVo make a profit? Well.. no, that's true, I think we were interested in time-shifting television programs.
Who do you think puts rebate programs together? And why?
I'd love to hear how you figure that long-term, loyal, evangelising subscribers aren't valuable to a company. If not them (us) then who?
#50: "If not them (us) then who?"
The people who will pay bigger margins, that's who. Tivo is a BUSINESS, and businesses need MONEY and PROFITS to survive. Early adopters like many on this board got good deals on S1 Tivos, and they STILL haven't upgraded. Are these people RELEVANT to Tivo's future? No, because they're not profitable.
Look at Tivo's income statements. They haven't been profitable because they weren't charging enough. So, they go out and do market research, and now they're going to raise prices in accordance with that. What good does it do anyone if they go out of business because they can't turn a profit? It's better for them to be a profitable niche company than a bankrupt one.
Anyone who complains about a company making a profit is not a good customer, by definition. It's fine if you want to be indignant about Tivo turning off the gravy train, but that doesn't mean Tivo isn't right for doing so.
*yawn* What a surprise, engadget commentors having a hissy fit over TiVo.
Fact: The large majority of TiVo subscribers select monthly. On a con-call last year it was mentioned that over 80% were monthly, and from a 10-Q filing last year the figure was 74% monthly. Either way, significant majority.
Fact: Monthly has been preferred for some time. From the 10-Q monthly subscribers were 40% of the base in January 2004, and are now 51%. It has been on an upward trend, showing that while early on lifetime was preferred, monthly has been preferred for some time and has shifted the balance, which continues to shift as lifetime boxes leave service and fewer new boxes have been lifetime.
Fact: TiVo trialed the new pricing plans last year and showed *significant* success. Results were that they improves sales *THREE TO FIVE TIMES* over the old pricing. It is unlikely that such improvement will hold for the widespread rollout, but it is expected to improve sales over the old pricing.
Lifetime, at the existing price point, is not financially viable for TiVo. I'll round to keep it simple. Consider an 80 hour box at $70 after rebate. Lifetime of $300. That's $370. TiVo's subscriber acquisition cost for the past year averaged $190 - that leaves $180 to the amortized over 4 years, just $3.75/month. TiVo's cost for providing service is $2.25/month. Down to $1.50/month - and that's before overhead. If the unit is in use past 4 years, then it is a loss on the books. That's just not financially viable. Lifetime either needed to be priced substantially higher, or be eliminated. TiVo decided it was better to eliminate it.
This is hardly the end of TiVo. Most likely the majority of people who used to buy lifetime, a minority of overall subs, will just switch to one of the new plans. If some small percentage decide to just not get TiVo, that's still better than selling them boxes at the old price point. And, based on the trials, it'll be more than offset by increased subs.
TIVO is fake. Their gator mouth overloads their hummingbird butt. They did away with their lifetime plan, I will do away with them.