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Tivo:  Beyond DVR
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Tivo: Beyond DVR

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UC MBA, MKTG 711

UC MBA, MKTG 711

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  • 1. : BEYOND DVR Benoit Jasmin Yiwen Stratton Steve Toerner Unitas (Group Jim Wolff
  • 2. Agenda Overview  Background  Alternatives  Recommendations  Target Markets  Marketing Strategies  Financials  Review 
  • 3. Background: SWOT Analysis Strengths   Software Development  Intellectual Property  Cable/ Satellite Distribution Weaknesses   Consumer Electronics Opportunities   Audience Research  Advertising Solutions  International Business Threats   MSOs can provide DVR equipment at cheaper prices
  • 4. Core Competence Cutting-edge software technology and  innovative research and development
  • 5. Alternatives Maintain current operations  Emphasize direct consumer electronic sales  Expand into international markets  Focus on mass distribution of software  Develop audience research & measurement  Promote DVR-based advertising  Redirect budgeted R&D money to marketing 
  • 6. Recommendations: 2 Year Horizon Drop stand-alone DVR sales  Focus on mass distribution of software  Develop audience research & measurement  (ARM) Promote DVR-based advertising 
  • 7. Target Customers Multiple Service Organizations (MSO)  Networks & Advertisers 
  • 8. MSOs: Market Share Comcast Other 22% 33% Time-Warner 12% Cox DirecTV 6% Charter 15% TiVo 5% 4% Cablevision 3%
  • 9. MSOs: Target Customers TiVo-client 35% Target 17% Other 48% Comcast Other 22% 33% Time-Warner 12% DirecTV 15% TiVo Cox 4% 6% Charter Cablevision 5% 3%
  • 10. Value Proposition: MSOs Provide customers with highest rated User  Interface (UI) Reduce customer churn  Provide competitive edge 
  • 11. Rationale: Mass Distribution No subscriber acquisition costs (SAC)  Take advantage of massive existing  distribution channels of MSOs Capitalizing on our core competence  Reduce manufacturing costs 
  • 12. Marketing Strategy: Mass Distribution Cross-functional team with sales and R&D to  develop product packages (complete by month 1) Strengthen relationships with  Comcast, Cox, Cablevision (begin upon completion of product packages) Develop relationships with Time Warner  Cable and Charter (begin in month 6)
  • 13. Advertising and Audience Research Targets: Network & Advertisers  Prime Prospects: Current Clients   BestBuy, Disney, NBC, Target, E*Trade, General Motors, Novartis, BMW, Lexus, Sprite, Kraft Foods, Lending Tree, Sony Pictures, Burger King, General Motors, Weather Channel, McDonalds, Nissan, Visa Possible Additional Targets   ABC, CBS, Fox  Open Door Policy: The sky is the limit
  • 14. Value Proposition: Network & Advertisers Provide more advanced and interactive ads   Provide alternate means of advertising  Ability to measure commercial viewership Provide more extensive consumer research   Viewer sample of 20,000 vs. 10,000 (Nielsen)  Second-second analysis vs. minute-minute  Capable of capturing DVR viewers  TiVo subscribers are hard to reach, young, and affluent
  • 15. Rationale: DVR-based Advertising Low competition  Minimal capital investment required  High margin potential  Offer innovative advertising solutions 
  • 16. Marketing Strategy: Advertising Increase ad-sales staff (begin in month  1) Promote TiVo-based advertising platform  (begin in month 1) Create cross-functional teams with  audience research staff to determine potential advertising clients (begin upon completion of research template)
  • 17. Rationale: Audience Research Strong brand recognition lends credibility to  audience research capabilities Huge existing database requiring no further  capital expenditures More extensive and efficient utility than  Nielsen’s service $900+ million market 
  • 18. Marketing Strategy: Audience Research Create cross-functional teams with advertising staff  to standardize report template (complete by month 2) Promote through current MSO partners (begin upon  completion of template) Expand to other networks and advertisers  (begin in month 6) Cross-promote with advertising 
  • 19. Pricing Strategy Subscription Pricing  Service Charge: $13 – 16 per month for  MSO consumer  TiVo nets approximately $1 per subscriber Advertising Pricing – variable based upon  client need and means Audience Research Pricing – variable  pricing depending on Nielsen service rates
  • 20. 2008 Forecasted Income Statement Projection Worst Case Most Likely Best Case PROJ. REVENUES TiVo Service $158,360,294 $158,360,294 $158,360,294 DirecTV $27,072,355 $27,072,355 $27,072,355 New MSOs $14,070,000 $22,110,000 $36,180,000 Audience Res. $18,000,000 $67,500,000 $90,000,000 Advertising $27,500,000 $30,800,000 $34,000,000 TOTAL REVS. $245,002,650 $305,792,650 $345,612,650 PROJ. $167,955,000 $167,955,000 $167,955,000 EXPENSES NET INCOME $77,047,650 $137,837,650 $177,657,650
  • 21. 2009 Forecasted Income Statement Projection Worst Case Most Likely Best Case PROJ. REVENUES TiVo Service $139,357,059 $139,357,059 $139,357,059 DirecTV $23,823,673 $23,823,673 $23,823,673 New MSOs $21,966,000 $40,548,000 $62,514,000 Audience Res. $36,000,000 $168,750,000 $270,000,000 Advertising $30,250,000 $37,822,500 $46,240,000 TOTAL REVS. $251,396,732 $410,301,232 $541,934,732 PROJ. $172,993,650 $172,993,650 $172,993,650 EXPENSES NET INCOME $78,403,082 $237,307,582 $368,941,082
  • 22. Review Continue service of current TiVo subscribers  Halt production of TiVo stand-alone DVRs  Focus on development of ARM, and ARM’s  “reach” to networks and advertisers (extremely lucrative ROI potential) Pursue new mass distribution partnerships  with cable distributors Redirect R&D funding to software, ARM,  and advertising innovations
  • 23. Long-Term Horizon Initiate mass distribution partnerships with  satellite and small cable distributors Investigate international market viability 
  • 24. Questions? Thank You!