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Technology Events BLOG Archive:
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Skipp's Blog This is the home page of the weblog (blog) that the author Scott Kipp is keeping for your enjoyment. September
9th,
2005 - TiVo Downloads Movies I finished a case study on TiVO last month and would like to follow up with a few updates. Since taking office, TiVo's new CEO Tom Rogers, has assigned Jeff Klugman to oversee the service provider activities. This is an important move and may help TiVo differentiate its high margin primary subscribers and their low margin service providers. TiVo is in an interesting position in this regard and is typical of a company that is trying to go both ways by selling retail and wholesale. TiVo only makes about $1 per service provider (DirecTV or cable) subscriber or $12.95 to its primary subscribers. Figure 1 shows how most of TiVo's 3.3 M subscribers are currently through DirecTV while a little over a million of them are primary subscribers.
Figure 1: Tivo Subscribers are mainly DirecTV subscribers and TiVo makes only about $1 per subscriber per month.
The difficult part of TiVo's relationship to DirecTV is that TiVo has very little control over these subscribers. Because DirecTV will not let TiVo download movies to them or offer advanced features like home networking or USB support, these are dead end subscribers from TiVo's perspective. TiVo will not be able to add incremental revenue to these subscribers except through advertising - the future cable subscribers will undoubtedly be the same. To increase revenue to these secondary subscribers, TiVo has set up advertising agreement with DirecTV for these subscribers. I can't believe the gall of TiVo to place additional advertising on the TiVo screen when they are fast forwarding over other advertisements. There is a solution to skipping these inserted commercials as well. If you are a TiVo customer who is faced with new inserted advertisements, the easy solution is to program the 30-second skip button by hitting select, play, 30 and select. This simple remote control entry will let you skip 30-second time slots instantly instead of waiting 7.5 seconds to skip a 30-second commercial at 4X speed. Most people like the skip better than the fast-forward. Once you're skipping, there's no chance for TiVo to insert the commercials. I expect the advertising revenue to be minimal and that most subscribers won't want the TiVo advertainment. A way for TiVo to increase their revenue is for them to download movies. TiVo ha finally announced that they are doing a trial download of IFC programs. Let's hope this leads to much more content being mad available for download to TiVos everywhere. Send any feedback for posting to info@broadent.com. |
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