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 TiVo has always had fanatical customers. When you can grab a TiVo remote and instantly use it with neither instruction nor frustration, you win devotees. While TiVo has become ingrained in our culture, people tend to choose the path of least resistance and that path has always been satellite and cable-supplied boxes. I know plenty of people who use Motorola, Dish or Scientific Atlanta set-top DVRs still say they 'TiVo' their programs. Obviously, TiVo doesn't make any money on those users. When Vista comes out, there will be a new bona-fide TiVo Series 3 competitor with CableCARD-capable Vista Media Centers. TiVo will even become its own competitor by supplying Cox and Comcast with software for the cable company boxes. It's been an uphill battle and will continue to be an uphill battle for TiVo.
New TiVo pricing is confusing at best. Can TiVo survive their own business model? Read more for details.
What is TiVo thinking? They're increasing service prices – just in time for the holidays! In my opinion, TiVo is struggling big time with their pricing of late. They're desperately trying to become profitable and at the same time trying to cultivate customers – a scale-tipping conflict that's rarely easy to win. TiVo had an opportunity with the Series 3. Leading the independent boxes with HD CableCARD support, they should have been able to take the market by storm. It was their opportunity to sell one with every new HD set. Instead, a five-year Series 3 commitment is nearly $1,400 – as much as lower-end 42" to 52" HD sets. Now, with Vista and dual-CableCARD support coming in early 2007, the enthusiast and higher-end market will have another HD option – an option that can play Half-Life 2 and surf the web. These service price increases during the holidays will not only cause potential customers to rethink taking the TiVo plunge, but will also cause existing customers to think twice about renewing. Remember, existing customers didn't get the lower-priced boxes that today's customers can get. Even if with the new free single-tuner SD box and a three-year committment, you'll pay the same price that a cable customer would for a dual-tuner HD box rental – albeit with a substandard interface. But it's HD! Full disclosure: I want TiVo to survive. It's a great service and a great box. Believe me, I know – I'm a three-TiVo customer with new a Series 3. That said, I'm not convinced that price increases and their current pricing models will help TiVo get stronger or weather the coming storms. Could TiVo have survived without the pricing increases?
New Pricing | Monthly Payments ($200 early termination penalty) | | Plan | Up-front | Annual Cost | Monthly Cost | | 1-year commitment | $0.00 | $239.40 | $19.95 | | 2-year commitment | $0.00 | $179.40 | $14.95 | | 3-year commitment | $0.00 | $155.40 | $12.95 | | Prepaid Payment | | Plan | Up-front | Annual Cost | Monthly Cost | | 1-year | $199.00 | $199.00 | $16.58 | | 2-year | $299.00 | $149.50 | $12.46 | | 3-year | $299.00 | $99.67 | $8.31 | | (after limited time offer) | $349.00 | $116.33 | $9.69 |
Assuming prepaid service, what's the total cost of ownership over five years?
| TiVo Box | Box Price | 5-years TiVo Service | Total TiVo Cost | | Series 2 80-hour single tuner | $0.00 | $599.98 | $599.98 | | Series 2 80-hour dual tuner | $69.99 | $599.98 | $669.97 | | Series 2 180-hour dual tuner | $169.99 | $599.98 | $769.97 | | Series 3 HD dual tuner | $799.99 | $599.98 | $1,399.97 |
So, what do all these numbers mean? It depends what you compare it to. Compared to a Vista Media Center PC with dual CableCARDS (which doesn't yet exist), the TiVo Series 3 is probably going to be less expensive – assuming about $2,000 for a dual CableCARD capable Vista Media Center. But, and this is a BIG but, the Media Center is a computer - you can play games, surf the web and do much more than you can with a TiVo.
Compared to to a $10 per month rental fee for a cable company dual-tuner HD-DVR – $600 for five years, the TiVo Series 3 is twice the price. The 80-hour dual-tuner TiVo is about the same price, but it's not HD. Also, as the TiVo ages, you won't get new boxes like you will with the cable company. Despite my hope, I'm not sure TiVo can survive this in the long term. It's clear that not everyone thinks the TiVo experience is worth the premium price. What do you think? Tell us in the comments below.
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