Some thoughts and highlights concerning today’s TiVo earnings call. Official TiVo page about the call.
Hat tip to PVRWire for pointing me towards the call.
First dude to speak was Tom Rogers, CEO of TiVo:
- The second quarter of 2005 is the first quarter that TiVo has reported a profit and earnings-per-share were break-even.
- Rolling out new program in the fall: buy a box (hardware) at a lower price if you sign a larger up-front contract committment. Compared this move to the way cellphone providers operate.
- Creating solutions with advertisers and marketers in a TiVo (PVR) world, where users skip commercials. See themselves as the search engine of the television world, where they help aggregate eyeballs to targeted media and brand messages.
- Subscriber growth in the second half of 2005 may be constrained by lack of inventory for any holiday promotions.
- There are still 40m+ analog cable customers, who TiVo see as their prime target currently.
Second dude to speak was Dave, no title given, so far as I could hear:
- 3.6 million subscriptions currently
- 77k gross subscription adds, which is flat year-over-year to last year’s 78k gross subscription adds.
- Refurb TiVo with 1-year committment program performed well
- $201 per sub to add a subscriber
- 214k net new DirecTV activations
Tom again; breaking news:
- Cablevision & TiVo trial marketing TiVos to win over satellite subs. Yahoo! Finance story.
Q&A with Tom:
- Echostar litigation question.
Tom can’t answer directly. Cable operators want to work with TiVo as is evidenced by Comcast deal and Cablevision news above.
- Main focus of TiVo besides recordable TV?
Tom says building distribution through cable MSOs and through better marketing of the stand-alone box. Dual screen business is definitely a consideration. TiVo has to be seen as something that has differentiated features besides being just a television-recording device. Always comes back to building distribution, more subscribers, greater scale to create more ad revenue.
- Why are the MSO deals good?
Circular talking, but basically the deals are better than the deal with DirecTV.
- Cost of service? Why up marketing when TiVo may not deliver on hardware? And why try for profitability so hard when MSO deals might help you do better later?
Tom says opportunity is high among the analog cable market, so it’s smart to go after them. Plus, research indicates that most of them won’t be upgrading quickly to digital cable. And, since TiVo has now proven profitability, they don’t want to stop working on the stand-alone market even though the MSO deals are going to kick in soon. Supply/Demand may or may not work itself out.
Dave tackles cost of service. Busier, more folks in the Holiday season.
- Broadband revenue possibilities? Money set aside for litigation?
Dave answering. Mostly financial mumbo-jumbo. I’m regretting blogging all of this a little bit. ;-)
Legal costs may have some impact on growth, but not significant.
- Subscriber target level? Advertising reach?
Won’t give a number, because they don’t want to be held to doing it going forward. Working hard on the stand-alone product. Want to give better historical data in these calls in the future, but not goals.
Advertisers see TiVo as a filter for ALL TV viewing and the service is a platform for creating a connection directly with a user/customer. This means TiVo doesn’t need to have 50-70M subscribers to be successful.
- Do you need another Comcast deal to succeed?
Don’t need to, b/c they’ve succeeded without them in the stand-alone market, but want, like and encourage; YES. Plan is to drive additional deals with cable operators for integrated boxes and stand-alone subscriber deals.
- How is TiVo different from Cable DVR solutions? Would TiVo over subs to cable companies?
Stand-alone has been a great inducement to the cable deals. Great stickiness that reduces churn for cable companies.
Then my wife called and, not knowing how to work all the shiny buttons on my phone, I dropped the call. :-(
I hope someone found this useful or interesting. Leave a comment if I’ve gotten something wrong of if you just want to chat.
UPDATE: Matt Haughey of PVRBlog has posted highlights from the call as well.