One of the more interesting aspects of any corporate conference call is the "forward-looking statements" that are always disclaimed at the beginning of the teleconference. During TiVo's quarterly earnings call, company executives played it pretty close to the vest, talking more about the plans of Cox and Comcast to roll out TiVo-branded set-top boxes, and how the company was managing subscriber turnover.
I did find this bit interesting, though:
"We are also heavily exploring bundling options with HDTV," said Thomas Rogers, TiVo's chief executive, as quoted in a Seeking Alpha transcript. "I would say that the HDTV television set trend was one where we didn't fully tie ourselves into that trend as well as I would like to see. We were certainly showcased in certain ways that now that we had a popularly priced HD product that we weren't before, but an awful lot of the purchase of a television set in the big box retailers involves people responding to good deals, good price cuts on sets. They go in and they make their television set purchase and the ability for a salesperson to steer in the direction of a bundled sale with TiVo, or I should say with sale of a TiVo, was really not part of the fourth quarter sales process.
"Over the course of this year, we're very much looking to see if we can accomplish bundled sales, actually selling the TiVo under some kind of an arrangement with the retailer at the time an HD set is sold and we think with that we could also see a different trendline in terms of what our overall net adds for the year are."
On the surface, this seems like a solid strategy. However, when a consumer walks into a big-box retailer and decides to purchase an HDTV, there are already a wealth of add-ons that retailer is going to throw at him or her: the "high-end" cables, perhaps a Blu-ray player, a sound system, and of course the extended warranty. It's unclear how many TiVo HDs this will sell, when, really, DVR functionality is basically an option for every digital set-top box manufactured today. Incidentally, the majority of TiVo purchasers pre-pay for one to three years of service -- not a problem when the TiVo is the only thing you're buying, but more of a shock when you add a $1,500 TV on top of it.
TiVo is still reporting losses: lost $6.4 million on $74.1 million, for the fourth quarter. But TiVo is banking on customers knowing who it is, and has cut back on marketing expenses. Was that a good idea? TiVo ended the year with 3.9 million subscribers who generate monthly fees, compared with 4.4 million the previous year.
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