TiVo Rewards: Are YOU the one we’re looking for?

Things like this make me worry that Tivo is having more financial problems than we know about. A contest or something every so often is nice, but it seems that Tivo is tricking up their marketing all sorts of ways that have nothing to do with marketing the actual product.

They need to expand from this contest and rewards program bs, and get into market segments that are beyond word of mouth and the Internet.

They have – they’re running TV ads again, I’ve already seen the ads. And there is a new print ad campaign coming. They’ve also been doing more joint marketing like the deal with iRiver and Dockers/JC Penny. That was promoted in mailings by those companies, their own ads, in store, etc. So they’re not just relying on word of mouth.

However, that said, word of mouth is VERY powerful for any company, and exceptionally powerful for a company like TiVo. Especially going into the fall shopping season. I know I’ve sold at least a dozen boxes – got referral for 7 (and I just cashed that in for lifetime on a RS-TX20). Probably more than that I don’t know about with all the posting all over the net I’ve done over 3 years, and talking up TiVo to strangers when it comes up. So incentivising their userbase to evangelize the product is actually a fairly cost effective way to get more users.

Because it is kind of fun I’ve been using Google Blog Search to look for TiVo related posts on LJ. Sometimes, when I see someone debating getting one, I pop in and answer their questions – I’m sure I’ve sold a few in the past week that way.

TiVo also recently did deals with an association representing rural cable companies as well as Cablevision to promote TiVo DVRs to their users.

TiVo turned an operating profit last quarter, and was on track to do it this quarter. The old management’s plan was to plan for slow growth and manage for profitability going forward. But the new management decided that the window for rapid growth is closing, and they want to get as many users as they can before the Comcast rollout (which will canibalize some of TiVo’s SA sales, to be sure) and before the DirecTV contract ends. So they’re making a big push for this years, to try to sell a lot of units this holiday season. Making a marketshare grab – the more users they have, the better they are long term from the ongoing revenue. And they’ve shown that once someone is a TiVo user, they’re not likely to jump to something else except another TiVo. So it helps lock people in, and maybe they upgrade to an HDTV TiVo when they ship, etc.

TiVo could stop the marketing expenditures today and be profitable, but right now growth is more important than profit – and the more growth they can make now, the more profit they have long term. It also puts them into a better position when negotiating more cable deals, etc.

Yeah I didn’t doubt they were looking, I just wanted to whine about it