TiVo cuts prices on services

Posted on Wednesday, June 9, 2004 by MegaZone

TiVo is cutting service prices on home networking and recording services for its standalone boxes as it looks to further boost subscription rates.

The San Jose, Calif.-based company is expected to announce Wednesday at a New York event price cuts for services used with its Series2 standalone digital video recorders (DVRs). TiVo’s networking software–called Home Media Option and had previously cost $99–will become part of its standard service offering for both monthly and lifetime subscribers. The company will also offer those with multiple TiVo boxes a price cut for additional recorders. The monthly subscription rate for the first recorder will remain $12.95, but additional recorders will cost $6.95. Lifetime subscriptions will remain $299.

I think this ia a good thing. Including HMO as a standard part of the service gives them a competitive boost. And it gives them the online programming, transfer between units, and photo viewing ReplayTV has included for a while – plus MP3 playback.

I just hope there aren’t too many people whining about having paid for HMO. (I’ve paid for it on three units – I don’t expect any kind of refund, it is just how things are.)

About MegaZone

MegaZone is the Editor of Gizmo Lovers and the chief contributor. He's been online since 1989 and active in several generations of 'social media' - mailing lists, USENet groups, web forums, and since 2003, blogging.    MegaZone has a presence on several social platforms: Google+ / Facebook / Twitter / LinkedIn / LiveJournal / Web.    You can also follow Gizmo Lovers on other sites: Blog / Google+ / Facebook / Twitter.
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  • trinsf

    Well, color me one of the whiners — I paid for HMO for two new Tivos within the past six weeks, right before the free HMO trial happened. *sigh* I would at least appreciate oh, a discount on service for a few months, or something. I doubt it will happen, though.

  • megazone

    It is always hard to be one of the last to pay for something right before the price drops – but refunds or credits are almost unheard of. I’ve been bitten by that in the past – buy something and the next week the price drops, or a rebate starts, etc. I’ve paid for HMO on 3 units so far – about $200. And I’ve been meaning to sell one of them – procrastinating means I just lost that resale value too. Such is life though.

  • benclark

    I guess I see the inclusion of HMO as part of the logical progression of TiVo. I mean, the capability for those features isn’t anything that TiVo can’t handle out of the box, and it doesn’t require anything except the one time installation of a few driver programs, so to me it just makes sense.

    However, I am *thrilled* to hear 2nd TiVos will only cost me $6.95/mo. That made my morning. :)

  • kill9

    Maybe it’s just me, but I’m wondering if the inclusion of HMO is partly there to siphon off some business from the new Airport Express from Apple, with music streaming to your stereo being one of the big selling points.

    Now that my TiVo will stream MP3′s from my Mac to my living room for free, I feel less justified in buying the product from Apple.

  • tpau

    since i am not an HMO member, iam wondering, nwo that it is standard, will it jsut magically appear on my tivo?

  • mangler103

    It might already be there. There was a free trial that started about a month ago, and it just seems like it’s not ending.

    If the item “Music and Photos” is on the beginning screen of your Tivo, then you’ve already got it.

    I mostly use the Remote scheduling option of the HMO. I don’t have much use for the other features.

  • drunkitty

    I’ve paid for HMO on two units and it’s money well spent in my opinion, plus paid for the lifetime subscriptions. I won’t be complaining.

    Now, on the other hand, my cable company is doing one of their little sales promotions to get people to sign up whereby they both tv and internet for half what I’m paying for like 6 months…. I want a piece of that!

  • drunkitty

    I think it’s the difference between paying a lump sum up front and paying for something ongoing.

    Like if I was a monthly subscriber to tivo and they dropped the price and didn’t pass it along to me, I’d have issues… but since I paid up front it doesn’t bother me.

  • moviemandan

    You still have to remember that its just Mp3′s that can be streamed from a Mac. Unfortunately iTunes Music Store Files can’t yet be played via HMO (This was the key reason why I never purchased it in the first place). The Airport Express however is something for sure I’ll buy being that I travel a lot and would like the streaming from iTunes wherever I place the unit its something for sure that I’ll use immediately. Apple is pretty strict on who they will be giving out the DRM decoding info to for streaming or even decoding the AAC files from the music store, I figure though TIVO has a better shot at it than anyone.

  • megazone

    That’s what I expect – just like the free trials.

    *IF* you have a Series2 standalone model – HMO doesn’t exist for any Series1 units, or DirecTiVo.

  • tpau

    i have an AT&T one. i think it is a series 2…

  • megazone

    Yep, those are S2.

  • buran

    I just bought one of those. Now, I can cancel the order, but I don’t think I will because getting 802.11g is something that I’m going to want to do when the Powerbook G5 comes out. Or I can go with the original plan and use it to stream music through to my stereo speakers. I do like the iTunes interface a LOT more than the Tivo one. And since it can also be a wireless repeater, I’ll have a better wireless net that will actually allow me to sit on the front porch and websurf (that is, once I get an apple-brand base station or another Airport Express.)

    So, really, it depends on what you need and like.

    BTW, there’s a checkbox for requesting AAC support on tivo’s feedback form on their website. (I was there yesterday requesting WPA support.)

  • kill9

    Yeah, I didn’t really care that much about wireless, since I’ve already got a perfectly good base station. But I definitely wanted to stream music from my home office PC to my living room stereo, and figured as long as I was going to drop some money, I’d buy the Airport since I’d get a 54Mbit base station out of the deal too.

    In any case, though, with free HMO and the service dropping to $7/month for extra boxes, I’m going to put a second TiVo on the bedroom TV. Good move on their part, really; they were never going to get that $99 from me for HMO, but they’ll get another $6.99/month they weren’t getting before.

  • unteins

    I will be whining too.

    I bought HMO because it was supposed to be a great exclusive feature. Now I just had something I paid for devalued.

    I was actually considering buying a 3rd Tivo unit, but obviously Tivo doesn’t give a rats behind about me, the existing customer because they don’t offer a discount for lifetime on new boxes and they just took $150 of value away from me….

    Yeah I feel all warm and fuzzy inside now…no wait, just hot….

  • megazone

    I don’t think it is a rational reaction – prices come down. Things that are extras get rolled in as standard features. That’s typical of most every industry. Most features that are standard on cars started as add-ons. People who paid extra for A/C didn’t get a credit because the next model year it was included.

    When vendors slash the cost on DVD decks, TVs, etc, the people who bought them at the higher cost don’t get refunds. Look at TiVo HW itself – they continue to drop the price. Both the MSRP and by adding on discounts and rebates. I don’t think you could expect that just because you paid $149 a few weeks ago and they’re $129 now that TiVo owes you $20.

    Almost everything you buy is devalued over time – very few things appreciate in value. That’s life.

    I always figured TiVo would eventually make HMO part of the standard feature set to compete as more and more boxes came out. With Digeo/Moxi starting to roll out, finally, with multi-media features, I think it was important for TiVo to stay ahead of the pack.

    I paid more for my TiVo HW than I would pay today. I spent $200 on HMO, all told. That’s water under the bridge.

    Hell, just a few weeks ago I bought I new laptop PC. When I did I deliberately asked if they offered a DVD burner option – and was told no, and no plans. Two weeks later they offered *two* DVD+RW options on the same model, and the pricing was a little better. I know that anything I buy I could probably buy for less if I just wait. With some things I’m still waiting – like HDTV – for others I’ve decided the price is at the point I’m willing to spend the money.

    I waited to get my Pioneer 810H until it dropped below $700. But prices have continued down – now Toshiba has announced a DVD-RW TiVo with 120GB (instead of 80GB) and DV input for an MSRP of $599. I could feel steamed because of that – but that’s just how it is, the progress curve in technology and consumer goods is invariably more for less.

  • megazone

    Oh, as for the lifetime thing…

    Lifetime is *already* a deal. It is like buying vs renting/leasing. You have resale value in the box when you buy lifetime. And it is still ~24 months breakeven on price for 1 unit, and now ~43 months for each additional unit. That’s just over 3.5 years, which is still within reason for someone to own a unit. That’s not considering resale value.

    60-70% of new standalone units are monthly (according to TiVo on the 5/25 con-call) so I suspect TiVo is catering to their majority market. And probably trying to encourage more monthly subs since it benefits them in the long run more the lifetime users.

  • unteins

    I definitely understand the idea that technology moves on, but what makes me angry is that they didn’t throw a single bone of ANY kind to me as a customer.

    I didn’t get an offer to save $50 on a new unit as an HMO subscriber.
    I didn’t get any kind of offer to get a discount on lifetime service because I have 2 Tivos already.

    I didn’t even get so much as an acknowledgement that uh, well yeah we are about to screw you over and give away what you paid for.

    I got nothing and when a company does that, I get angry and I don’t recommend them to anyone any more.

    More than that, considering there ARE plenty of alternatives to Tivo now, it doesn’t make good business sense to thumb your nose at paying customers. When someone asks me if they should buy Tivo or Windows Media Center, right now, I would tell them that I feel Tivo treated me poorly as a customer and pulled the rug out from under me. At least if they go with Microsoft they can be prepared for that sort of behavior.

  • megazone

    I’m sorry, but I strongly disagree. It makes no sense for them to offer special discounts, etc, to existing customers – that would ruin their bottom line if they did that every time they lowered pricing, etc. What company is going to do that? If they offered $50 credit to every HMO subscriber that’d basically be the same as throwing away the HMO revenue they made – the street would *murder* them for that.

    I don’t see how TiVo pulled *anything* out from under you, period. If you paid for HMO then you must’ve thought it was worth it. If you didn’t, then it was foolish to pay for it. This sounds like buyer’s remorse – if you’d waited you wouldn’t have had to pay.

    But that’s basically true for everything – wait long enough and it is cheaper, sometimes free. If you seriously don’t recommend any company that does this kind of thing I don’t think you’d be able to recommend *any* company. This is standard across pretty much all industries. Companies constantly offer incentives only to *new* customers, without offering the same thing to existing customers. You can get discounts on cell phone service if your new, introductory rates on credit cards, discoutns on DSL for 3 months with new service, DirecTV offers all kinds of specials for new customers only, etc. It is a long standard business practice, and I don’t see any problem with it. Attracting *new* customers is harder than keeping existing customers, so you have to offer more to entice them.

    TiVo didn’t shaft you at all and I really don’t understand how you can perceive that they did. They offered a product at a given time for a given price, and you bought it. Now they’ve deciced to bundle it as a competitive offer. How does that damage you, other than feeling like you could’ve waited?

    Do you hold it against them that the HW costs less than when you bought it?

    They could offer something, but that’d just be a nice gesture on their part. I don’t see any negative to them not doing so. And I think it is completely irrational to go as far as not recommending a product you say you like just because they didn’t do something *extra* for you.

  • trinsf

    I realize what you’re saying here, but I don’t agree with your position. For example, you mention that you bought a laptop two weeks ago, and the price has since gone down, etc. When we make purchases like that in my household, we make sure we purchase someplace that does adjustments, or has a return policy with no restocking fee, just in case this happens. My partner has his eye on a new Fujitsu Lifebook. We’re holding out for the next 30 days because of rumors it’s about to be discontinued. Even when we do buy, it’ll be at a place with a 30 day refund /price adjustment policy. That won’t help if it happens 90 days from now, but it will take some of the “sting” out of it.

    I’ve been lusting after a Tivo for several years (a good friend was a VERY early adopter), but I only just now (in the past two months)reached the point where I could afford one. I scrimped and saved to buy a 40 hour unit, making sure I got it at a place that had a 10 percent discount offer, with no sales tax and free shipping. My intention was to get the smallest possible new unit, so that I could afford it, and then gradually upgrade it. A week later, refurbs reappeared on the Tivo site. Bad timing!

    That Tivo became *so* popular in my household that 30 days later, when I again had some money, I bought a 40 hour refurb. I tried to hold off on the HMO, because I had this strong feeling, maybe from some rumor I heard, that HMO would soon be included. However, I got a rebate offer for HMO from Tivo, so I scrimped and did that, even though it was a bit of a stretch, thinking that it might otherwise be a while before I can afford it.

    Within a few weeks, HMO is free. Bad timing. But more than that, I feel like Tivo was using the rebate offer to wring the last amount of money out of new owners like myself before going free. I don’t know — is it likely that Tivo had no idea a month ago they were going to include HMO?

    I don’t think every person who has ever paid for HMO should demand a refund. On the other hand, in the same way I only shop at places that offer adjustments if they reduce the price within 30 days, I would expect that Tivo might offer some kind of break or benefit to very recent HMO subscribers. Hell, send me a mug or a tote bag and I’ll be a happy camper — just something to say, “Gosh, we’re aware that you feel a little cheated, and we can’t fix that, but we can show you we appreciate having you as a customer.”

  • megazone

    I think TiVo has a 30 ‘return’ policy on HMO. So you may be able to get your money back if you bought it within the past month.

    As for them knowing about the pending drop – I’ve worked for enough corporations that I could believe it wasn’t something planned for a long time. Perhaps they are worried about DirecTV pulling away and they want to do something to drive standalone sales. DTV has been accounting for around 2/3rds of TiVos users. With DTV leaving the board and selling their stock, maybe this was a contingency plan that they decided to put into action. It could be something they had in their back pocket for just such an event.