Tuesday, May 29, 2007

TIVO


Everyone knows what a TIVO is, but how many people do you know that actually have one? I don’t know one person that actually has a TIVO, which is probably why TIVO can not turn a profit. Where did TIVO go wrong? The have tremendous product recognition but every cable company or satellite company has there own version of a TIVO that comes bundled with the service. TIVO is to announce quarterly earning tomorrow and will likely post another loss. So how can TIVO become profitable? Well here are some suggestions to save TIVO:

1. Team up with the cable companies! If you can’t beat them, join them. TIVO should team up with a cable provider like Timer Warner, Verizon, or Comcast to reach a wider audience.

2. Model the business plan after the cell phone carriers and give the product away! The profit is all in the programming anyway, so give the units away for free. If TIVO required a one year programming contract with every unit they would be positive in no time. The base units (80 hours) are selling for $99.99, while the bigger 180 hour unit is selling for $199.99, and the steroid unit (300 hour) is selling for $599.99! No one in there right mind is going to spend six hundred dollars on a TIVO when the cable companies are giving them away for free! If you truly believe in the product than the customers will continue to use the service after the contract has expired.

3. Hire a new CEO. Having a CEO that has a vision of where the company should be heading is crucial to any company’s success. TIVO needs a fresh start with a new CEO that has not been sitting on the company’s board of directors like there current CEO Tom Rodgers.

Turning a company like TIVO out of the red is going to require some huge changes. TIVO is a tough stock to trade because they don’t have the financial stability or growth potential that most investors are searching for. TIVO’s best asset is there name recognition and they need to use this to turn the company profitable. I will keep TIVO on my watch list, but not in my portfolio.

2 comments:

GoingLikeSixty said...

Maybe you're hanging with the wrong crowd. Boomers love DVR - or as well call it: Tivo, whether or not it really is Tivo. So they really have a marketing problem.

1. Good idea. DirectTV and Dish already have DVR packages.

2. Even better idea!

3. Ok by me

Tivo has great name recognition but it's become the generic name for DVR. That's never good.

Brett P. Philips said...

Thanks for reading