TiVo Reports Narrowed Q4 Loss, Unveils New Pricing Plan

Mar 8, 2006  •  Post A Comment

Digital video recorder maker TiVo said Wednesday that it posted a narrowed loss in the fourth quarter, fueled by subscriber growth.

TiVo also said it plans to introduce a subscription pricing model that enables customers to fold the price of a DVR box into the monthly subscription bill.

The Alviso, Calif.-based company reported a loss of $19.5 million for the three months ended Jan. 31, compared with a year-earlier loss of $33.7 million. Revenue surged 37 percent to $47 million.

For the year, TiVo recorded a loss of $34.4 million, down from red ink of $79.8 million a year earlier. Revenue jumped 48 percent to $170.9 million.

The company attributed the growth to improved results in what it calls its “owned customers”-subscribers who sign up for the service directly through TiVo. The company reported 221,000 gross additions to that subscriber base, compared with 276,000 a year earlier. The company said the quarterly results marked the second-best period of customer additions in the company’s history, even with the decline from a year ago reflecting a tougher competitive environment.

TiVo as a general practice makes a distinction between its owned customers and those derived from its relationship with satellite company DirecTV. Historically, DirecTV has driven much of TiVo’s subscriber growth, but that is coming to an end as DirecTV begins favoring a DVR from a TiVo rival.

The number of customer additions coming from the DirecTV relationship fell to 173,000 in the fourth quarter, compared with 379,000 a year ago.

Starting next week, the company will begin rolling out a new subscription pricing model that will enable new customers to fold the price of an 80-hour DVR set-top box into the monthly fee paid for TiVo service, the company said. The plan follows months of analysis of how to best stoke sales at the retail level, the company said.

As part of the new pricing strategy, TiVo will make the service available in one-, two- and three-year packages. The one-year plan costs either $19.95 a month or $224 prepaid, while a two-year plan goes for $18.95 a month, $369 if prepaid. The three-year plan costs $16.95 a month or $469 prepaid. The company said it is ending the lifetime service agreement option.