TiVo may begin giving away its PVRs to attract more customers, CEO Tom Rogers said this morning. The company soon will
begin offering a range of pricing options, including a plan that would offer a free box in exchange for possibly higher
monthly charges. Rogers made the comments
during the Reuters Global Technology, Media and Telecoms Summit in New York. "We're continuing to pursue the
prospects of zero upfront and all upfront" pricing, he said. In addition to a higher monthly fee, the free-box
plan may also require a longer term commitment, he noted.However, this isn't the first time that TiVo has had a free-box offer. During the 2005 holidays, it offered a 40-hour box for free if you were willing to pay a $16.95 monthly fee for at least a year. So Rogers' comments must mean TiVo is considering doing something similar on a permanent basis. The offer is enticing, but is TiVo worth 17 bucks a month, even without any upfront costs? After all, that difference between the current $13 fee and the higher monthly charge will continue until the day you decide you no longer want the service -- rather than continuing only long enough until you pay off the cost of the free box. And the plan TiVo is currently considering could mean fees even higher than $16.95. Maybe we'll find out more during the company's March 3 conference call.
1. I think it's a great idea, one that they have experimented with not too long ago. IIRC in their experiment the pricing worked out to juct about the same price as buying a TiVo and paying for one year (or was it 18 months?) of service.
Though many people HATE rebates, and I've heard reports that unfulfilled rebates amount to a significan amount for TiVo which probably drives up revenue more for a purchased TiVo (compared to a subscription supported) knowing that not all the rebates will be fulfilled.
If TiVo charges too much for a monthly fee for the subscription service (probably much over $15/mo) they won't get as much adoption, charge too little and they could cannibalize sales of the purchased TiVos.
One thing they need to do is make sure it's eay to turn the subscriber customers into regular customers. You can get someone to pay $15 per month for the first year or two but not for a long time. Maybve give the subscription customers the opportunity to buy a (slightly) discounted lifetime service, or switch to standard monthly service at the end of the subscription contract.
They will also need to offer the monthly service discount for second and subsequent TiVos for people who initially opted for the subscription service for their first TiVo, this is something that the previous experiment did not do.
Posted at 1:46PM on Feb 27th 2006 by Robert Aitchison