Alviso, Calif. — TiVo’s fiscal third-quarter net revenue jumped by nearly 30 percent, hitting $49.6 million, compared with a year-ago $38.3 million.
At the same time, the company was able to reduce its three month loss by nearly half, down to a negative $14.2 million, from a loss of $26.4 million in the same quarter in 2004.
TiVo, the creator of television services for digital video recorders, attributed its narrower quarterly loss to an increase in new subscribers, which rose to 434,000 total net new subscribers in the three months, ended Oct. 31, up from 419,000 in the same three months the prior year.
Total cumulative subscriptions as of Oct. 31 were a bit over 4 million, a 74 percent growth in the subscription base, compared with 2.3 million the previous year.
The company cited rebates that cut the cost of TiVo’s lowest priced DVR to $50 and a DirecTV promotion that pretty much gave consumers a free TiVo recorder as the primary reasons for the subscription increases.
TiVo-owned gross subscription additions in the third quarter hit 92,000, compared with 119,000 in the same period last year. TiVo-owned net subscription additions reached 55,000 in the three months, compared with 103,000 year-on-year. The company cited increased competition from cable companies that offered their own DVRs as the key reason for the decreases.
DirecTV net subscription additions were 379,000 for the quarter, compared with 316,000 in the same period a year earlier — the bulk of total new subscribers for the quarter, due, again, primarily to a rebate promotion.
Claiming “reasonable progress” following the third-quarter results, TiVo’s CEO Tom Rogers attributed three factors to the company’s results — “more cable competition, a far greater increase in DirecTV subscriptions following a rebate program that offered an effectively free TiVo DVR, and our own marketing program that started well into the quarter, compared to the full quarter last year.
“Given these circumstances, and the investment we made in the testing of and learning from various marketing initiatives during the third quarter, we believe these results demonstrate reasonable progress,” said Rogers.
However, the company does anticipate a net loss of $17 million to $22 million in the fourth quarter.
“We are focused on growing our subscription base through three major efforts,” said Rogers, “by reinvigorating our sales and marketing efforts, differentiating ourselves from generic DVRs with unique features and continuing to develop partnerships and alliances to further broaden TiVo’s reach.”
Service and technology revenue at TiVo in the third quarter increased 52 percent year-over-year, reaching $43.2 million, up from $28.4 million last year.
Subscription acquisition costs in the third quarter jumped to $308, up from $275 in the same three months last year. TiVo-owned average revenue per subscription increased to $8.80 in the third quarter, compared with $8.74 in the same period in 2004. DirecTV average revenue per subscription in the same time frame came in at $1.15, down from $1.56 year-on-year.
For the nine months, TiVo net revenue rose to $135.9 million, up from $112.6 million in the same period last year. Net loss for the nine months was reduced to $14.9 million, compared with a negative $46.2 million year-on-year.
Average subscription acquisition costs for the nine months climbed to $178 from $174.
