TiVo is hitching its wagon to high-definition television growth.
The U.S. digital video recorder leader offset its continued drop in subscribers from an expiring agreement with DirecTV by selling more high-definition machines and bundling them with Mitsubishi HDTVs being sold on Amazon.com.
The DVR maker said Wednesday that net income for the quarter ended April 30 was $3.64 million, or 4 cents a share, up from $835,000, or 1 cent, a year earlier, despite revenue being little changed at $60.8 million. The company was expected to lose 1 cent a share on $55.6 million in sales, according to the average analyst estimate in a Thomson Financial survey; the company said in March that it would lose $1 million to $3 million.
TiVo cut subscriber acquisition costs in half by reducing advertising and instead bundling its hardware with Mitsubishi HDTVs sold on Amazon.com, TiVo CEO Tom Rogers told analysts on a conference call Wednesday.
TiVo, which introduced its $299 high-definition DVRs in August, also sold more set-top boxes at their retail price and gave away fewer standard-definition machines as part of promotional efforts.
“The TV is not going away as the center of entertainment in the household,” Mr. Rogers said. “Thirty-two million HDTV sets are expected to be sold this year. We are moving to more aggressively bundle TiVos with HDTV sales.”
Additionally, TiVo’s subscriber turnover rate fell to 1.3% from 1.5% in the fiscal fourth quarter. TiVo had 3.8 million subscribers, down from 4.34 million a year earlier, as U.S. satellite TV leader DirecTV stopped including TiVo DVRs with its new subscriptions after discontinuing its licensing deal. The company, whose owned subscription count was little changed at 1.73 million, in January started offering its DVRs to Comcast subscribers in the New England area.
TiVo also said Wednesday that it struck a deal with the Walt Disney Co. that will allow customers to “soon” download the studio’s movies to their DVRs over the Internet. Such films will be available to rent for a 24-hour period, with “many” in high definition, the company said.