TiVo deathwatch update: it's still on

As some of you may remember, a couple years back we (begrudgingly) posted a TiVo deathwatch, which was to remain active until TiVo becomes consistently profitable (or gets bought, or dies). Well, as of two days ago TiVo did in fact post its first profitable quarter, taking in $835k. (TiVo broke even once in 2005, but that's about as good as it's gotten.) Whereas we're really stoked for the crew in Alviso, the fact is less than a million bucks is chump change considering how much they lost in Q106 ($10.7 million); and unfortunately, TiVo also lost 102,000 subscribers from DirecTV in Q107 (whereas Q106 they added 53,000 net new subs). That means TiVo is down subscribers to 4.3m from the 4.4m they had this time last year.

We've spent the last couple days thinking this over, but as much as we'd like to plant a flag in the ground for TiVo, we're just not ready to lift the deathwatch yet. We just still haven't seen consistent profit, the Comcast rollout has been pending for over two years, and while TiVo cut some dead weight and lightened costs, it's still losing -- not gaining -- customers. On a more positive note, we have a feeling that as soon as these Comcast STBs DO start rolling out TiVo is going to rack up crazy amounts of happy new TiVo users, and will hopefully start turning a real profit in turn. But until then we can still only stay cautiously optimistic at best. Fingers crossed, TiVo folk, we're still with you. [Warning: PDF link]

[Anthony @ Jun 1st 2007 3:10PM]

I hate DirecTV's HD DVR: Captions are crummy (15 button pushes to turn on, 15 more to turn off), scheduler is weak (2 weeks out & no profiling unless the show is currently airing) & numerous other issues. But unfortunately it's what they're pushing & they make it really difficult to get full functionality out of a Tivo box these days.

[d @ Jun 1st 2007 3:27PM]

The day I buy a TiVo is the day that TiVo is a software app for my media PC.

[coyotej @ Jun 1st 2007 4:21PM]

TiVo probably won't be a standalone product for Media PC any time soon (the HTPC concept is generally still a hobbyist, not mainstream, market segment). However, if the Comcast thing goes well, it probably wouldn't be surprising to see it show up on other Cable/Satellite companies' boxes.

[jason w @ Jun 1st 2007 3:26PM]

I have a series 2 with lifetime and love it. I would get a 3 but didnt want to pay permonth. If my cable company offered a 3 with hd I would gladly add a few extra bucks to my bill for it.

Moxie is ok for HD recording but the Series 2 I have is easier to use for my wife.

[Scott @ Jun 1st 2007 3:34PM]

FYI, Amazon's got a sweet deal going on for the S3 - you can get the unit itself for right at $600, plus TiVo's offering a $200 rebate (Father's day thing) with a 1-year pre-paid subscription. That brings the cost of the unit itself down to $400-ish - 50% off.

I ordered one yesterday. I've still got a S1 and I hate Comcast's DVR. :(

[Brian @ Jun 1st 2007 5:56PM]

You are going to need to use an IR blaster to change channels since the comcast boxes are now so small there is no serial port.

[kpfeif @ Jun 1st 2007 3:40PM]

DirecTV's DVR can bite me. They'll have to pry my DirecTiVo out of my hands. It's awesome.

[Matt O @ Jun 1st 2007 3:41PM]

ive had a series 2 for the last 3 years...i love my tivo.. end of story

[Mark @ Jun 1st 2007 3:45PM]

I had Tivo, and I had Tivo from Direct TV. I am not sure who the holds the cards in the relationship, but people with Tivo via Direct TV are getting only a half-Tivo. Furthermore the decision for DirectTV to place all the new HD content into MPEG4 and not upgrade the HR-250 (Tivo HD) is pathetic a best.

[mrjam @ Jun 1st 2007 3:50PM]

COMCAST needs Tivo in a bad way. How the COMCAST DVR stands now its a pain to use and the interface stinks. I had Tivo for years and loved it. After my year contract is up I will be switching back to Tivo, a far more superior product.

[Tom @ Jun 1st 2007 4:08PM]

the TiVo business model just doesn't make for a good public company. or a profitable one, for that matter.

[teb @ Jun 1st 2007 4:28PM]

"the TiVo business model just doesn't make for a good public company. or a profitable one, for that matter"

You're kidding, right? They give you razors and sell the blades- they give you the phone and sell the calls.

This model has been VERY successful for a very long time. The problem they have is that the movie studios have demanded all sorts of restrictions on fair-use under the assumption we are all thieves. I agree it's a problem, but if that free market so many people worship actually works, then Tivo will succeed. The biggest complaints are not about what they do, but what they aren't allowed to do. Take off the MPAA shackles, and this company goes through the roof. Even as it stands, as HD hits more and more homes, Tivo is the most likely to benefit.

[Ian Zabel @ Jun 1st 2007 4:25PM]

Ryan, did you mean Q107 when you said "TiVo also lost 102,000 subscribers from DirecTV (whereas Q106 they added 53,000)"?

Not exactly sure where you're getting that 53,000 number either. The press release says "TiVo-Owned subscription gross additions for the first quarter were 57,000, compared to 91,000 gross additions for the year-ago period."

[Ryan Block @ Jun 1st 2007 5:11PM]

Page 10 -- gross factors current subs, was looking at total sub net additions.

[MegaZone @ Jun 1st 2007 4:46PM]

One important point is that TiVo-owned subscriptions are up year over year, while DirecTV subs are down. But DirecTV subs only bring in about $1/month per sub to TiVo, while TiVo-owned subs bring in a lot more - ARPU is up to over $9 on TiVo-owned subs. So even with a shrinking total subscriber base, the current base is actually worth more to TiVo.

On top of that, the TiVo-owned subs are also the users who can use services like Amazon Unbox, which contributes to TiVo's revenue. So there is further value in those subscribers.

In the past TiVo said that DirecTV accounted for only about 10% of their revenue, and that's been dropping as DirecTV subs drop and TiVo-owned subs rise. So the impact of DirecTV on revenue is diminishing over time.

They did announce, quoting Comcast, that Boston, and parts of MA and NH will see the commercial roll-out of the TiVo software in August, with trials ongoing until then. So we finally have a date out of Comcast.

[cstockton @ Jun 1st 2007 4:47PM]

I love tivo but I just wish they had a product that we could use with DTV.

[Scott @ Jun 1st 2007 6:14PM]

Nope! Going the dual CableCARD route. :D

[Mark @ Jun 1st 2007 6:09PM]

I'm one of the 102K DirecTV subscribers that TiVo lost in 1Q07, but it was entirely DirecTV's fault, not Tivo's.

That said however, TiVo really needs to find a way to get built into the boxes offered by cable and satellite companies, and they need to be full-fledged TiVo's that network, etc. Right now TiVo is only effective for Basic and Expanded cable. Cable cards are a joke, the cable companies don't want to support them and you need a separate card for every tuner in every TiVo you have. TiVo software and guide data is vastly superior to the generic DVRs currently offered by cable and satellite companies, but their window of opportunity is closing.

[NutMac @ Jun 1st 2007 6:21PM]

"You're kidding, right? They give you razors and sell the blades- they give you the phone and sell the calls."

Not entirely a good analogy. Yes, when you buy a razor, you buy blades as it wears out.

When you buy TiVo, you have to pay TiVo to use it. It's similar to cell phones. The key difference is values. With cell phone, you pay to use carrier's network to make a call, send messages, and browse the Internet. With TiVo, you are essentially paying $13-17 a month for TV guide. Yes, there are occasional feature updates, but most are minor and major updates usually require additional fee. To me, $13-17 a month is rather excessive for something I can get for free on the Internet. TiVo isn't making money precisely because of high subscription fee. Many folks are turned off by huge monthly fee (should be similar to $5-6 that cable/satellite charges for DVR). Not enough buyers, not enough revenue.

[Evan @ Jun 1st 2007 6:32PM]

I expect the emerging video-download services will take a huge bite out of TiVo in the coming years.

[John @ Jun 1st 2007 6:57PM]

In my opinion, TiVo is a unique service that has the potential to be good, but the reason they have lost and will lose money and members is because their customer service is HORRIBLE.

I bought TiVo generation 2 in 2003 and wasnt until recently that the hard drive burnt out. I have called, emailed sent letters with NO reply. But the big deal is I have a life time subscription to that box, so I cant go out and buy another and change it over. Now it is sitting above my TV collecting dust. Its been over 6 months and no answer, so they lost me as a customer, as well as my wife and two of my friends once I told them about this. Shame...

[Mark @ Jun 1st 2007 7:25PM]

@ John

That IS horrible. They really won't even respond? I have a Series 2 TiVo and a Humax DVD TiVo that both have lifetime subscriptions. Since they explicitly state that you can't transfer the subscription, they better damn well service the boxes!

[MegaZone @ Jun 1st 2007 7:32PM]

John, it seems a little hard to believe that you called customer support and they didn't do *anything*. The box is long out of warranty, but their standard way of handling that is to offer an out-of-warranty repair, which costs something like $149, IIRC.

But if it is just the drive, you can just replace that yourself. WeaKnees.com and DVRupgrade.com sell ready-to-run drives. Or you can just buy an IDE drive and image it yourself. $20 will get you an Instant Cake CD from DVRupgrade.com with everything you need on it. Image the drive, put it in the TiVo, done.

Mark - Lifetime is lifetime of the box, period. If it dies, TiVo is under no obligation to repair or replace it, nor transfer the service. That's clearly stated in the agreement. The fact is, they generally do offer to repair (really, replace with a refurb) a broken box for a fee.

[andy @ Jun 1st 2007 9:25PM]

I transferred lifetime to my new s3, and I couldn't be happier.

I get my HD ota, and record cable. Life is good.

[Christopher P. TOdd @ Jun 1st 2007 9:57PM]

I went from a series 2 to a series 3 and moved my lifetime as well. It is a wonderful machine. I am also MUCH happier now that I got rid of cable and don't feel as if I am sucking their opiate laced teet! Gave that habit up and not going back. Get my HD content over the air now. All great except for the fact that CBS here in chicago is a JOKE! All-in-all I love the product!

[Bungho @ Jun 6th 2007 10:19PM]

I couldn't agree more.

Tivo can't own the PVR for much longer, in fact I think they have lost SO MANY customers due to comcast dvrs. They need to get away from the subscription model and find a way to be profitable for free...I know, it sounds impossible but they are screwed otherwise.

[Uchendu Nwachukwu @ Jun 1st 2007 10:47PM]

TiVo's savior may actually be the FCC, who is requiring that, starting July 1, Cable companies do not offer cable boxes with built-in security; ie. ALL cable boxes deployed after that date must either support CableCard or DCAS (Downloadable Content Access System.)

All TiVo has to do is support DCAS, and they are set.

[Cods @ Jun 2nd 2007 4:38AM]

Deathwatch? Well, then death throes are interesting - it looks like TiVo has finally officially entered the Australian market, in partnership with Channel 7 over here. See www.mytivo.com.au for details. Press release here: http://www.mytivo.com.au/tivopressrelease.pdf

I might be able to add a HD TiVo (unsure as to what generation) to my hacked 1st Gen OzTiVo. As long as it all pans out, of course - Australia is faced with the bewilderingly dumb situation of TV channels challenging the legality of EPGs. Argh, fools.

Cheers,
Cods

[Joe & Ammie Bradley @ Jun 2nd 2007 10:41AM]

I just got a Series 2 DVR. I would have gotten a 3 but didn't for two reasons. It is too expensive (but not by much and the more important reason is the second reason) and the TivoToGo features are not enabled in the Series 3 and I have no confidence they ever will be as they've promised. I used to have the DirecTV tivo and I loved it. However, there have been 2 other DVRs that I've loved also. UltimateTV was way ahead of its time and was great. Also, the Dish Network HD DVR was really nice. It's interface kinda sucked, but it had several features that Tivo should integrate immediately. It had Dual Tuner and Dual (discrete) output as well as RF Remote controls (2 remotes to control the 2 discrete outputs). So you could set up one box to control all the tvs in the house and watch or record two programs simultaneously.

The one DVR that I wish I could have taken a sledge hammer to is Comcast's HD DVR (Motorola Phase 3). It constantly froze up on me while I was watching recorded programs, its hard drive was WAY too small, and its interface was crap. I ditched it for my new Tivo Series 2.

[/eric @ Jun 2nd 2007 12:12PM]

@John

I had a similar experience with them as well. Series 2, they did a software upgrade. I turned on the TV and the diagnostic had something like "restart pending" on the status line. I went ahead and restarted (as I've done many times before) and it stuck on "just a few minutes more" screen. I waited a half hour or so and power cycled. Same thing. Called tech support and was told that since it was out of warranty, I could buy a refurbished unit. Keep in mind, this unit was working perfectly before the software upgrade. They have no repair facility, no option other than buy a referb (that most likely just needed a software reinstall). So it now sits in the back bedroom closet, nearly forgotten.

The really sad thing is, I feel terrible posting this (TiVO was the first product I really talked up like a fanboi), and I'm sure I'm the exception. but hey, if my Motorola DVR dies, I just loose a few shows. Heck, the cable company will even send out a guy to replace it, for free. TiVO has a great product, but they cannot support it at all. I will likely try out the TiVO software if it ever is available for me, but I'll never buy their hardware again.

[tplewe @ Jun 2nd 2007 2:53PM]

Anything over 5-6 bucks per month is waaaaay too much to get a large number of people to pay for dvr service. DVRs shouldn't be offered as a service, or there should at least be an option to not subscribe and not get the listing information and just set the timer yourself for your shows. I'm sick of not having subscription-free options for VCR functionality (but with a hard drive recording HD).