Digital video recording company TiVo found increasing business in its fiscal third quarter to be a double-edged sword, with the company adding about 419,000 subscribers during the three months, but having to spend more money to acquire the new business.
The subscriber additions in the third quarter, ended Oct. 31 — more than twice the 209,000 added in the same period a year earlier — contributed to TiVo posting a net loss of $26.4 million in the three months, compared with a net loss of $7.4 million a year earlier.
Net revenue in the third quarter — which subtracts rebate and revenue-sharing costs, but includes set-top box sales — dropped to $38.3 million, down from the $43.2 million posted in the same three months in 2003. Rebates and the other costs came in as a loss of $18 million in the quarter, widening from the $3.9 million loss reported in the year-ago period.
Service and technology revenue, which does not include box sales, rose to $28.4 million in the three months, from $22.7 million last year. Service revenue, alone, climbed 73 percent year-on-year to $27.7 million from $16 million.
Of the 419,000 new subs in the third quarter, 316,000 were generated through DirecTV, the satellite TV provider, which is TiVo's largest source of new subscribers. This compares with 150,000 DirecTV-generated subs in the same period a year ago, an increase of 111 percent.
TiVo-owned business in the third quarter reached 103,000 subscribers, up 75 percent from the 59,000 that came on board in the same three months last year. Total number of subscribers for the period ending Oct. 31 hit 2.3 million, more than double the 1,002 million recorded a year earlier.
For the nine months, TiVo net revenue rose to $112.6 million from $98.4 million, while the company's net loss reached $46.2 million, up from a net loss of $19.7 million in the same period in 2003.
DirecTV-generated subs for the nine months hit 737,000, up from a year-on-year 248,000. TiVo-owned subs rose to 234,000, up from 130,000. Total subscription additions for the period increased to 971,000, compared with 378,000 in the same nine months last year.