TiVo Premiere Not Rated “E For Everyone”

Monday, March 15th, 2010
By Ross Rubin, Executive Director, NPD Connected Intelligence

TiVo has long been the poster child for how difficult it is to sell subscription products at retail. While its monthly service plans may have initially been conceived to be friendly to cable providers, they overwhelmingly balked and instead devised their own generic solutions. These often had inferior user interfaces, but were tightly integrated with cable services such as VOD that TiVo could not accommodate, even by using CableCARD. TiVo didn’t help its cause by offering the popular lifetime subscription lump sum, then discontinuing it, then reinstating it after facing competition from Digeo’s Moxi.

Indeed, the lifetime subscription option haunts TiVo whenever it tries to upgrade its hardware, since the lifetime subscription is tied to the life of the device, not the owner. Upgrading from TiVo’s Series 3 to its new Series 4 means the customer has to purchase another lifetime subscription to avoid monthly bills. Lifetime subscribers, then, are less likely to upgrade, particularly given that TiVo Premiere focuses on polishing features already available to Series 3 owners, as opposed to offering extensive new capabilities.

Because of this, subsidized distribution of cable and satellite DVRs, and a host of TV sets and Blu-ray players offering many of its broadband entertainment features without any subscription, it will be a challenge for TiVo Premiere to reverse the fortunes of the DVR category at retail. In 2009, there were only 4 percent fewer DVR units sold at retail than in 2008, but 2008 was a miserable year for the category, with units down almost 40 percent. However, with prices starting at $299, the TiVo Premiere should at least restore some of the declines we’ve seen in average selling prices, which fell to $214 last year as TiVo closed out Series 3 inventory.

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