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TiVo Reports Higher Revenues, Reduced Loss

11/30/2006 08:04:00 AM Eastern

Alviso, Calif. – TiVo reported higher revenues and a reduced loss for its third quarter, ended Oct. 31.

Service and technology revenues for the quarter increased 22 percent to $52.6 million, compared with $43.2 million for the same period last year. TiVo reported a net loss of $11.1 million compared to a net loss of $14.2 million for the third quarter of last year.

“Given our efforts to differentiate TiVo, we are pleased that we were able to build momentum relative to last year, with TiVo-owned subscription gross addition growth up 10 percent at 101,000 compared to 92,000 in the third quarter of last year,” said Tom Rogers, CEO of TiVo.

Overall TiVo-owned subscriptions were up 24 percent year-over-year to 1.6 million. As expected, TiVo reported a net decline in the number of DirecTV TiVo subscriptions during the period as DirecTV deployed fewer TiVo boxes. Cumulative total subscriptions as of Oct. 31 were up slightly from last quarter to 4.4 million and up 11 percent over the year-ago subscription totals.

Rogers added, “On the sales and marketing front, we continued to see strong results from our online channel, which we believe are directly attributable to the compelling pricing changes we made in the first quarter of this year and our ability to leverage results from this very efficient sales channel. Online sales increased sequentially as a percentage of total sales from 33 percent last quarter to 43 percent this quarter.”

He noted, “As of Nov. 5, we introduced new hardware pricing available at all retail stores that provide the single-tuner hardware free after mail-in rebate and for a reduced fee after mail-in rebate for the dual-tuner hardware. At the same time, we have created uniform subscription pricing across online and retail store customers to enable us to nationally advertise in print, radio and television, which began in mid-November. This approach provides us with an opportunity to reduce inventories on the single-tuner box, a product on which we will not put much focus on in the future.”

The TiVo CEO noted that following the holiday period, the company will be “evaluating the success generated by this kind of hardware pricing approach versus an approach where there is less reliance on rebates and a greater emphasis placed on advertising the TiVo product.”

Rogers remarked that the introduction of the TiVo Series3 High Definition Digital Media Recorder, what he called “the first stand-alone TiVo product that is HD compatible, is an important step for TiVo. While still in the early days, we have received positive consumer feedback on the product, with Series3 sales meeting our expectations.”

The TiVo Series2 Dual-Tuner box, which launched in the second quarter, represented approximately 58 percent of all sales, highlighting the continued popularity of this product, Rogers said. Also in the quarter, approximately 47 percent of TiVo-Owned subscriptions came from the analog market.

“Over the course of the quarter, TiVo continued to develop and deploy new features that further differentiate the TiVo service from its generic competition. Specifically, our broadband strategy is enabling us to take full advantage of the explosion in growth of video content on the Web,” Rogers said.