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TiVoted might not like this – there is more competition looming for their beloved personal video recorder. Despite inventing the market, and hitting the 3 million user mark, the company is going to have more competition on its hands. NDS Group, a division of News Corp, and Scientific Atlanta are going to launch new versions of their personal video recorders. Analysts expect massive improvements and parity with TiVo in terms of ease of use. This means fewer opportunities for TiVo to grow its business. It is only a matter of time before company gets acquired by a larger player, says Vintage Research William Kidd. No Kidding… really we did not know that! Given all the problems Comcast has had with Motorola-made digital video recorders, they might still be interested in TiVo. (Tivo Copy Cats via Reuters)
Now that everyone has started chanting the mantra I started preaching three years ago, I am going to think different. I think TiVo can be saved – actually with very little work. Here is how – TiVo should basically give away two million of these devices in next one month – hit the 5 million subscriber mark. That’s $65 million in monthly revenues (assuming everyone pays $13 subscription fees.) At those numbers the company can do $750 million in annual sales. Now since DirecTV customers are a big chunk of these customers, lets assume the revenue/annum is $600 million a year. Next cut back on marketing completely, ala Apple in lean years. Stop pushing the service – and turn TiVo into an exclusive club, a BMW among PVRs. Give the latest and the greatest to folks who want to pay for that, i.e. the TiVoted. Apple is a good lesson for TiVo – sure not the size of a Dell, but still making more cash. As a company focus on pushing the envelope, and develop one or two great products every year. Someone wants to come into the TiVo-fold, well, let them pay the “club fees” of $13 a month, and a device that the company doesnot sell at a discount. BMW doesn’t discount, Apple doesn’t discount. Get the drift.
Of course, no growth in subscribers means Wall Street isn’t going to like it. To that, I say screw them. How about taking the company private. Leveraged buyout! Small, company, which can become profitable. I know there is one gentleman who reads my blog, and is a tech buyout guru who could pull it off. Slow growth and profits versus certain death – well I take the former. TiVoted – what do you say?
What is TiVoTed? Old Red Herring copy maestro Jon came up with the phrase: TiVoted, worshippers of the TiVo personal video recorder (PVR). A cultlike following doesn’t necessarily translate into a huge market share. Just ask Steve Jobs.