--However DirecTV Customers Still Account for Bulk of Subscriber Growth
DVR vendor/service provider, TiVo, has released financial results and subscriber acquisition numbers for its fiscal third quarter, ended October 31st:
--Service and technology revenues for the quarter totaled $43.2 million, compared to $28.4 million for the year-ago quarter.
--Net losses totaled $14.2 million, or $0.17 per share, compared to $26.4 million, or $0.33 per share, for the year-ago quarter.
--The company added 434,000 net new subscribers during the quarter, compared to 419,000 for the year-ago quarter, bringing its total subscriber base to 4,008,000--which represents 74% growth over the past year.
--However, the company's subscriber growth was still largely due to the DirecTV with TiVo service, which is offered by satellite TV provider, DirecTV: the latter--which is in the process of launching a DVR service of its own, based on the XTV platform of its News Corp.-stablemate, NDS--has stated publicly that it plans to cease actively marketing TiVo service. In the third quarter, 379,000 of TiVo's net new subscribers were DirecTV with TiVo customers (compared to 316,000 for the year-ago quarter), while only 55,000 were TiVo-owned subscribers (compared to 103,000 for the year-ago quarter). TiVo-owned gross new subscribers, meanwhile, totaled 92,000, compared to 119,000 for the year-ago quarter. In a prepared statement, TiVo CEO, Tom Rogers, commented on the company's subscriber totals: "Three factors affected our results," the statement read. "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."
--The company also provided some guidance for the current quarter: it expects service and technology revenues to range between $43.5 million and $45.5 million, resulting in a net loss of between $17 million and $22 million.
In a second prepared statement issued with the results, CEO Rogers outlined TiVo's strategy for growing its subscriber base, which includes targeting the analog basic cable market: "We are focused on growing our subscription base through three major efforts," the statement read. "By reinvigorating our sales and marketing efforts; differentiating ourselves from generic DVR's with unique features; and continuing to develop partnerships and alliances to further broaden TiVo's reach. Our sales and marketing efforts were primarily focused on testing and learning the efficiencies of pricing, messaging, media mix, and market profiles that will yield the most effective subscription acquisition efforts going forward. Particular focus was paid to the analog basic cable market. Our TiVo Series2 offers a unique solution to this rapidly growing market segment, and is the only real solution for analog customers that want a DVR in the living room. Some early traction is evident," the statement continued, "as the number of new analog basic subscriptions has increased as a percentage of new subscriptions. We are also finding that local markets with high analog cable penetration are responding to our improved marketing efforts. At the same time, our work with Comcast in developing the integrated TiVo cable experience to offer the best-of-breed service to the digital segment of the market continues, as do our conversations with a number of other cable operators."
In other TiVo news: the company says that TGC--a company in which it owns a substantial minority interest, and which holds an exclusive license for TiVo's technology in the China, Hong Kong, Taiwan, Singapore and Macao TV entertainment markets--will shortly launch the first TiVo-based DVR in Taiwan for retail purchase (note: cable penetration in Taiwan is over 80%).
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