The TiVo Quarterly Call (No Tru2Way This Year)

TiVo held their quarterly call yesterday and, while I don’t pretend to be financial analyst, I’ll share my uninformed ;) observations.

As TiVo sometimes does, the Investor Relations group began their earnings day by releasing a bit of fluff news to the press – I don’t know if this is designed to distract the market to soften the blow, juice the stock price, or what. Regardless, I didn’t bite.

The quarterly results seem generally positive… TiVo was guided to just their third profitable quarter (!), though this is largely due to a continued reduction in marketing expenditures – perhaps accounting for the net loss in subscribers. While the majority of these folks retired from the obsolete DirecTiVo platform, stand-alone TiVo unit subscriptions were also in decline. (Fully amortized Lifetimed units also push the subscriber number down, but they didn’t volunteer exactly how many that is.) However, TiVo has no debt, plenty of cash on hand, and I get the sense they feel like they’ll be coming into even more related to EchoStar’s patent infringement. Going forward, TiVo expects to pick up additional customers via newer channels consisting of the MSO dealios (Comcast, Cox) and their Australian offering.

Related to the tech itself, I didn’t come across many interesting nuggets. It’s expected that Cox will begin offering their custom TiVo solution this fall in New England. Related, Comcast is expected to increase both their marketing and market presence beyond New England beginning next month. Specific regions weren’t disclosed, but I heard something somewhere a long while ago that Denver was to be one of the initial sites. We shall see.

In regards to a Series4 Tru2way TiVo unit, it doesn’t look we’ll be seeing anything soon. Surely not in 2008. According to CEO Tom Rogers:

The retail Tru2way issue, we have agreed with the cable industry that we would look to provide a OCAP or Tru2way retail device. It is something that we would like to do, meaning something that a consumer could go into any retailer and purchase and plug it into any cable system anywhere in the country and it would just work. There are a number of CEs that are focused on Tru2way devices. Our view is that that whole regime is going to take more time to be clarified and to get the ability for players such as ourselves to build on a national uniform homogeneous basis. We are not alone among the consumer electronics players seeing that that is going to be a slower process than the cable industry may have liked, and certainly issues that we see along the way we bring to CableLabs’ attention, although there isn’t any one at this point that I would necessarily say conflicts with our objectives.

I can’t say I’m surprised with TiVo’s conservative approach given recent industry reports. I’m not even sure this needs to be a priority. However, an interim solution of a TiVo HD with integrated SDV tuning adapter would go a long way towards maximizing TiVo compatibility within the shifting cable landscape. In other cable marketplace news, TiVo doesn’t seem overly concerned with Cablevision’s network DVR. According to Rogers, “a lot of legal issues that still need to be resolved on that front” and there’s an “inadequate capacity at this point for broad scale deployment of a network DVR solution.”

Seeking Alpha TiVo Call Transcript
TiVo Quarterly Earning Release

8 thoughts on “The TiVo Quarterly Call (No Tru2Way This Year)”

  1. “…stand-alone TiVo unit subscriptions were also in decline.”

    Maybe if they opened up a little, not be so closed, they could get more users. Allow a new lower level of service at the edges? I used to have a TiVo box and really liked it, but so expensive!

    Example: Sell a $99 box that just records shows, that’s it, pipe in advertising and throw out the monthly subscription. Then let me buy my way out of the advertising if I want.

  2. I would’ve been surprised if tru2way was supported any earlier. In fact the current size of the tru2way is already going to be very small when Panasonic releases tru2way TVs later this year, and even some have doubts we’ll see them this year.

    I expect TiVo to have an announcement at CES, as just about every major manufacturer who recently signed on to the tru2way agreement is expected to announce TVs at the same time.

  3. Comcast TiVo coming to Denver. Hooray. However it’s too little too late we already switched to DirecTV a few months ago. Almost a year of the terrible Comcast DVR was all we could take. It’s no TiVo. Even the Comcast TiVo doesn’t sound like it’s really a TiVo.

  4. I own both a Tivo S3, and stock in the company. Owning both, I think Tivo producing a tru2way device would definitely benefit me (and many others) in both cases! I currently rent a cable box to allow access to VOD. An integrated tuning resolver would only help in a limited capacity, depending upon how MSOs deploy SDV. It’s possible that Tivo is losing customer base BECAUSE consumers like myself are currently required to have an additional box to utilize the VOD services. If a box from the cable provider is required to get VOD, why not get a DVR from them as well? I personally will never do that, and have considered completely dropping cable service, and relying on internet content (downloaded to my Tivo) for my entertainment. My monthly fee to cable would purchase a LOT of content from Amazon Unbox, or *free* content from the internet using Tivo Desktop for my computer. I do agree with Todd’s assessment that a tiered subscription plan would allow users to pick and pay for those features that they want.

  5. I could care less about tru2way and SDV, I want an HD TiVo I can use without selling my soul to Time Warner (I’d go without TV altogether before I’d become a subscriber of theirs).

    There may not be many people like me who avoid cable because they hate their cable company, but there are a lot of people who don’t have access to cable (between 1/4 and 1/3 of all pay TV subscribers, depending on the statistic you use) for whom TiVo has no HD product even in development (as far as we know).

    I LOVE my two TiVos but it’s getting more difficult to ignore the lack of HD.

  6. Robert, I don’t particularly care for my cable company either. (And will dump them as soon as Verizon lights up my neighborhood with FiOS.)

    The TiVo HD works perfectly fine with an antenna. I’ve used mine that way before, pulling in HD ATSC. Is this what you’re referring to?

    Or are you talking satellite? If satellite, some of the newer chips out there are affordable for mainstream CE devices and can record off component. The quality will most likely be reduced from the source, but it should be sufficient for most. So, theoretically, TiVo could build a box that uses IR to control and HD satellite STB and archive that HD content. Though maybe they’re just holding out to renew with DirecTV or pressure Dish into an agreement.

  7. Is an integrated tuning resolver possible? I’m assuming the Motorola product must be used in markets with Motorola head-ends and the Cisco product must be used in markets with Scientific Atlanta head-ends, and the two aren’t compatible with each other. Is this not correct? Obviously a box with an integrated tuning resolver would be better than one with a little external STB hanging off the Tivo, even if purely from an asthetic point of view…

    I’ll be shocked if we actually see a tuning resolver deployed ANYWHERE this year, let alone freaking tru2way… And honestly I think tru2way applications are going to s-u-c-k. Its not like that blue blobs TV Guide crappy interface to VOD that is barely responsive to the remote, horribly slow, not remotely intuitive etc is going to suddenly get better when its running under OCAP on a Tivo…

    Personally I could care less about VOD. With access to Amazon Unbox via Tivo, and my Apple TV I’m dropping cable channels like HBO and don’t need VOD either. The interface is just so awful, I can’t be bothered to use it. Even ignoring how little is available in HD.

    However, based on the success of VOD and Cablevision’s patent success, I think Tivo is burying its head in the sand a little about the competition. Obviously a DVR service your cable co can turn on without visiting your house, and that might even be cheaper than their current DVR box rentals will hurt Tivo somewhat… Course that may depend on how much people are willing to pay to fast-forward thru commercials…

  8. Glenn, I doubt it can be simply done. There may be a hardware issue, but it’s probably more logistical in terms of provisioning. And the MSOs have no motivation to work on an interim solution since they’d argue tru2way is designed to handle this and the interim solution exists as a stand-alone tuning adapter. Which may or may not be available to cable customers this year.

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