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TiVo in 2005: The Way Forward By LT4 Anurag, Azlan, Carl, Goldy, Jen, Medel
Outline of presentation DVR Business –Brief Intro Consumer perception and profile Trends Competition Strategic Issues/ Challenges Causal Factors Way ahead – objective Strategic Options  Org. Capability assessment , prioritization
TiVo’s Business Personal TV provider for DVR technology (Software/service and Hardware) Providers of unique services to the advertising industry for promotions and audience research – only available from TiVo Business model  Standalone sales online and thru national CE retailer -Ex. Best Buy etc. Licensee of DVR technology to the industry -Ex.Toshiba etc. Partnership with MSO’s (Cable TV  and/or Satellite TV) –Ex.DirecTV Revenue -> combination of direct sale revenue, subscription fee, license fee and research/advertising revenues Over 3M subscribers as of 31st Jan 2005 Competitors: EchoStar, Replay TV, NDS, Open TV, Scientific Atlanta, 2Wire, Akimbo even MS, HP, Sony and IPTV from telcos. Board members are NBC, Coca Cola, Sony, Omincon and Discovery
Consumer’s perception & Profile Not clear on the usage What TiVo could do and What TiVo could not do Half of market analyst used PVR and rest DVR Customers were surprised on monthly fee Average customers not grasped the concept 97% of TiVo users were very satisfied Enthusiast Comfortable with technology Married, 25-45 Monthly Income: 70k – 100k Families with young children (parent control feature)
TiVo subscriber trend and forecast
Competition
Competition Comparison
Before TiVo TV viewing Majority of television viewing happens during primetime hours Virtually all televisions watched “Live”  Life fits into the network schedule
After TiVo: Primetime is Anytime Majority of television viewing occurs outside primetime hours Up to 70% of some programs viewership is recorded Reality, news and sports are the only genres that retain much live audience In recorded mode, the vast majority of commercials are skipped
TiVo powered DVRs
Advertising & Research partners
Core Issue/Challanges Significant net losses since inception Threat of survival
Causal Factors High payback period –new product new market (single product –only service till 2001) Introduction of Hardware (initial investment, longer payback) in 2002 Emergence of formidable competition-low margin /pricing pressure Limited Market -8mn as of 2005 (36% share)

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Tivo in 2005 strategic inflection lt4 rev 01

  • 1. TiVo in 2005: The Way Forward By LT4 Anurag, Azlan, Carl, Goldy, Jen, Medel
  • 2. Outline of presentation DVR Business –Brief Intro Consumer perception and profile Trends Competition Strategic Issues/ Challenges Causal Factors Way ahead – objective Strategic Options Org. Capability assessment , prioritization
  • 3. TiVo’s Business Personal TV provider for DVR technology (Software/service and Hardware) Providers of unique services to the advertising industry for promotions and audience research – only available from TiVo Business model Standalone sales online and thru national CE retailer -Ex. Best Buy etc. Licensee of DVR technology to the industry -Ex.Toshiba etc. Partnership with MSO’s (Cable TV and/or Satellite TV) –Ex.DirecTV Revenue -> combination of direct sale revenue, subscription fee, license fee and research/advertising revenues Over 3M subscribers as of 31st Jan 2005 Competitors: EchoStar, Replay TV, NDS, Open TV, Scientific Atlanta, 2Wire, Akimbo even MS, HP, Sony and IPTV from telcos. Board members are NBC, Coca Cola, Sony, Omincon and Discovery
  • 4. Consumer’s perception & Profile Not clear on the usage What TiVo could do and What TiVo could not do Half of market analyst used PVR and rest DVR Customers were surprised on monthly fee Average customers not grasped the concept 97% of TiVo users were very satisfied Enthusiast Comfortable with technology Married, 25-45 Monthly Income: 70k – 100k Families with young children (parent control feature)
  • 5. TiVo subscriber trend and forecast
  • 8. Before TiVo TV viewing Majority of television viewing happens during primetime hours Virtually all televisions watched “Live” Life fits into the network schedule
  • 9. After TiVo: Primetime is Anytime Majority of television viewing occurs outside primetime hours Up to 70% of some programs viewership is recorded Reality, news and sports are the only genres that retain much live audience In recorded mode, the vast majority of commercials are skipped
  • 12. Core Issue/Challanges Significant net losses since inception Threat of survival
  • 13. Causal Factors High payback period –new product new market (single product –only service till 2001) Introduction of Hardware (initial investment, longer payback) in 2002 Emergence of formidable competition-low margin /pricing pressure Limited Market -8mn as of 2005 (36% share)
  • 14. Way ahead…Objective Financial Turnaround by generating significant additional revenues to achieve sustained profitability How ? Strategic Options ?
  • 15. Strategic Options Is it the question of either of above or all (majority) of above with prioritization?
  • 16. Further challenges … Market- How to increase usage/adoption? Future regulation relating to copyright law or evolving industry standards and practices that could adversely impact the business Positioning Mass market or niche? Identity -“DVR business” or “entertainment service business” Organizational Capability Financial leverage Support function capability building for expansion (do we have capability to scale the business?)
  • 17. TiVo’s USP R&D – IP rights Brand
  • 18. Market 5X increase in 4 years (2005-09) Shift from cable operators to DVRs Need to differentiate and have strong distribution to reach to mass to capitalize early innovation
  • 19. Advertisement Initial Ads http://www.youtube.com/watch?v=2a3ZzKVHQws&feature=related http://www.youtube.com/watch?v=Ws34lRRj0ec http://www.youtube.com/watch?v=Jo4ESU9dJr4&feature=related My tivo gets me http://www.youtube.com/watch?v=s1iM4ZUt3Ms&feature=related