TiVo tries rebate to lure subscribers
Company will drop price of its digital video recorders by $100, as part of a plan to rapidly boost subscriptions.
The San Jose, Calif.-based company, whose fee-based service lets people pause live TV and digitally record programs, said it will offer a $100 mail-in rebate on its 40-hour set-top box, which sells for $199.
The price drop comes amid growing investor concern about TiVo's growth potential, especially as partner DirecTV prepares to offer other digital video recorder (DVR) options to its satellite TV subscribers next year.
TiVo's rebates, effective Wednesday and running through September, also apply to other TiVo models. With the rebate, the 80-hour model will cost $199 and the 140-hour device will cost $299.
In addition to the cost of the box, a TiVo subscription costs $12.95 per month or $299 for the life of the product. The company is also updating the design of its Series2 models to reduce manufacturing costs and plans to sell the boxes in more national retail chains, such as Costco and CompUSA stores.
Earlier this year, TiVo said it will spend $50 million to bolster its marketing and promotions, a plan that will swell its operating losses this fiscal year.
The drive comes amid TiVo's hopes to boost subscribers to 10 million by 2008, from its current total of about 1.6 million, with revenue rising to $1 billion annually. In fiscal 2004, which ended in January, its revenue was $141 million.
In addition to increasing the ranks of its DVR users, TiVo is also building alternative features as it works to expand its offerings, especially as cable and satellite TV providers develop their own recording systems.
On Wednesday, TiVo received Federal Communications Commission approval for technology that would permit people to send copies of digital broadcast shows over the Internet to a limited number of friends or family members.
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