adam1991 wrote:what would ACTUALLY happen is that Tivo would sell you the box for $350 lifetime, then sprinkle mandatory ads at the beginning and end of each show--no stopping, no FF, no RW.
If you are suggesting that a $350 target price can only be achieved by subsidizing costs with advertising revenue, might I remind you that the dominant players in this market have managed to make profitable DVR boxes for far less than $350 per box without resorting to such tactics. Additionally, if you look at TiVo's financial history for the past 10 years, you'll see that TiVo had $920 million gross income on $2.08 billion in revenues. That's a 44% gross profit margin! In other words, they are selling their boxes for roughly double what it actually costs to make and distribute them. Unfortunately, TiVo has had no choice in the matter because they can't effectively manage their expenses. In the past 10 years, TiVo has spent 60% of their gross income on research and development, and 85% of their gross income on selling, general, and administrative costs. 85% + 60% = 145%. Oops. No wonder they've only had a profit 2 years out of their entire 14-year history. With that kind of poor money management, I'm surprised they're even still in business.
FWIW, TiVo has paid a total of about $50 million to their key executives over the last 5 years. I'm clearly in the wrong business. Give me $50 million and I'll run any company you want into the ground.
slowbiscuit wrote:Bottom line is that smart folks that want a superior DVR choose either Tivo w/lifetime or roll their own HTPC (or both, in my case, because Tivo has yet to deliver the 'whole home' solution at a decent price). Everything else you said is geared towards the masses, and I agree that marketing to monthly is a dubious call for the consumer (but apparently not for Tivo).
But as I said, I really don't care what the masses do - I was strictly talking about the value equation of a lifetime Tivo vs. renting a cable DVR, and I and others are winners there because we're into DVRs for the long haul not the short.
Now that we can agree on!