TiVo (Rogers) presented today at the Maxim Group Growth Conference.
When the first comment out of the CEO’s mouth is BS, you pretty much know its going to be the same old rock bottom story. TiVo is NOT riding the DVR growth curve which Rogers described. TiVo is losing subscribers and is totally off the racetrack.
I continue to believe strongly that Tom Rogers’ lack of credibility is a serious negative for TiVo. The company’s performance has been terrible under this CEO and reality relative to the connotations of his statements is consistently distant.
TiVoHD is being sold online direct at no subsidy. Retail sales have some subsidy. Given that, its time for TiVo to stop doing subscription plans for the TiVoHD and Series3s. TiVo needs to offer $X/$6.95 no commitment subscriptions, where X is less than $12.95. TiVoHD/S3 should sell for $549/$679 w/ Lifetime or free with $X,Y,Z/mo for 1,2,3 year commits. That’s the All Upfront and No Upfront that Rogers promised two years ago.
TiVo thinks retailers are enthusiastic about having the TiVoHD to sell with their HDTVs. Retailers are always happy to have something to sell, and we’ll see just how long that lasts when they realize unit sales are being restricted to pathetic levels by TiVo’s sub plans.
TiVo’s strategy (since first mentioning the lower priced HD unit) has been to closely link sales of the TVs with the TiVoHD. TiVo wants to be one of those select devices the salespeople push. So how much is that going to cost in soft marketing $? Plenty. Rogers obfuscates whether TiVo is actually in that game with any of the retailers. I suspect not. Credibility.
Rogers mentions Costco and Sears as new on board with the TiVoHD. Not true. Costco has had TiVoes for a long time. Credibility.
CableTiVo: No new info. I expect $1.10-$1.40/mo/sub to TiVo with enhanced ads etal. vs. under $1.00 from DTiVo. Included in the lack of new info is that ComcastTiVo has not rolled out. TiVo says software development is done and any delays are due to funky infrastructure issues at Comcast. Is it semantics? (Credibility) Who cares; it ain’t rolling out and there was no statement that it is coming in X weeks unlike on the earnings call.
Comcast is paying for the bulk of the marketing and will be targeting DTiVoes. Ooooops, do I hear the cannibals? Marketing will be delayed until Comcast has the rollout in a large portion of the NE region. So don’t expect much in 2007 or FY2008 for TiVo.
Of course, this leads to the subject of DTV doing more with TiVo. Rogers teases the interest of DTV in further work with TiVo that apparently was expressed in some DTV press release or comments. Credibility.
Rogers’ comment about DTV reminded me of the line I heard in the Geek Squad 60 Minutes report recently: Three types of customers – The do it yourselfers; the do it for me’s; the I thought I could do it myselfers.
OK, I think DTV will re-up with TiVo on a new unit or software for their units, but its a long way from getting to the customer, and remember for all the success of that product line, DTiVo never came close to offsetting TiVo’s other financial issues. Don’t foret that in conjunction with CableSoftTiVo either.
Nothing of substance was said about the litigation. I think there could be an Appeals decision at the end of 2007, but maybe early 2008.
Rogers addressed Unbox, USS, Ads and Ad measurement without anything of substance. TiVo ought to be saying something more about the Ad & Ad measurement business along the lines of it producing something noticeable by now. Credibility.
Nothing much on international. He did say from AUS TiVo gets sub fees ($$??) and development costs are paid by the partner.
In running down the financials, Rogers talked about reducing SAC, HW subsidy through more ad spending. In effect he says ads will raise GAs enough to offset the spend and reduce overall SAC. Come on; exactly the opposite has and will happen. Credibility.
TiVo still wants to waste resources finding a way to go after the analog market. 50% of new subs still are analog, so don’t run away, but get real – there is no opportunity there. Sell the S2s in the warehouse or dump ‘em on the Mexicans. Of course with $11.2M in writedowns (on top of $2.5M (?) ) TiVo will show some decent looking financials. Credibility.
Rogers mentioned rising ARPU, but it didn’t look to me like it rose much. Credibility. That may become less of a theme, and TiVo should go the other way anyway.
On SA marketing, TiVo still wants to go after analog customers. TiVo has found that there is a perception that TiVo costs $25-30/mo; someone is smoking something. TiVo wants to change that impression. TiVo wants to present the message that it is cheaper than cable; well, for many $6.95 MSDers the TiVoHD is, but that’s it for now. Credibility.
TiVo also wants to improve the understanding of broadband content offerings. Rogers mentioned 3M songs on demand and Unbox. OK, but the value may not be large and the cost of educating may be. I don’t know about the songs, but you pay extra for most Unbox titles and its still all SD, so that value is limited.
So nothing to lift our spirits. TiVo is still going to hurl money out the window uselessly for now. I still owe more analysis on the 2nd QTR and some suggestions on strategy, but its so hard to get down to it.