I took a few notes during the call. Sorry, I do work, so I couldn’t post them right away. 
A lot of the talk was about TiVo’s experiments with different marketing and pricing plans. They discovered a couple of major points:
- Longer form advertising converts better. One minute is better than 30 seconds. Two minutes better than one. And a 30 minute infomercial best of all. The more time they spend explaining the product and how it is different from the cheap DVRs out there, the more sales the ad generates. So expect to see more infomercials and longer ads from TiVo. They also said that providing more information in their online ads, sites linked from the TV spots, etc, drives more sales. Basically: More info == more sales.
- They’ve determined that the up-front pricing on the unit is a major barrier to adoption. Customers seem to be comfortable with the recurring monthly fee, but balk at paying for the box upfront and then also paying monthly, even when it is just $50. They reported that they get “far better conversion” from the experimental offer with no upfront charge, but a higher monthly fee ($16.95 – minimum one year). They said that they will continue to explore different combinations of pricing and commitments to see what produces the best results. They will be testing offerings for more than one year of service, but that aren’t lifetime.
I’ve said it before, and I’ll say it again, if they could get the units into people’s hands for free, they’d convert a lot more people into customers. I think they should go with a cellphone style pricing tier – $200 for the box with no commitment. $100 for the box with one year commitment at $12.95. Free box with one year commitment at $16.95. Free box with two year commitment at $12.95. That kind of thing. Tier the pricing to encourage longer commitment periods.
While they continue to work on digital cable & HDTV solutions, it was reiterated that both the CableCARD system and the Comcast TiVo DVR are still on track for 2006, TiVo is focusing their efforts on the huge analog cable market. Cable DVRs are only offered to digital cable subscribers, which is a minority of the market. For a large number of users, the cost of adding TiVo to their analog cable is less than upgrading to digital cable and adding the cable DVR. TiVo will be aggressively pursuing this market. Both through their direct marketing to the consumers as well as through the cable providers. As part of the formerly announced partnership with the National Cable Television Cooperative (NCTC), TiVo is working on educating cable providers on the advantages of TiVo to help them market TiVo to their users. TiVo will be marketing themselves as the premier DVR solution for the analog cable market.
TiVo is segmenting the market into three major categories: the basic cable analog market, the digital cable market, and the high end market. As a slight tease, they just said the high-end market relates to products that will be introduced next year, targeting the home theater market, etc. Hmm…
The basic analog market is approximately 36 million homes, and likely higher. Today about 30% of TiVo’s standalone subscribers are analog, and with their new focused advertising they’ve pushed that to about half of their new subscribers, while only 1/3 are digital subscribers. As many members of the NCTC are rural, analog only cable companies, TiVo is working with them to offer TiVo to their users.
On the Comcast front, it was stated that TiVo will be an option for any Comcast digital cable customer with a Motorola DVR. TiVo will be offered as an option. Customers can decide to opt-in for TiVo and Comcast will update their unit in the field automatically, magically turning it into a TiVo overnight. Later in the call it was clarified that the software is being ported to the Motorola 6412 DVR – which has been known for a while, but also to a new, advanced Motorola DVR which will be replacing the 6412 next year. TiVo was asked about the mobile (TiVoToGo) capabilities of the Comcast product. TiVo made it clear that the platform will be capable of supporting TTG and all the TiVo features, but would not comment on what Comcast may or may not deploy on their systems. One analyst kept pushing how the Comcast unit would work for mobility, apparently unaware that the 6412 has 2 USB ports and a wired Ethernet port. The Comcast software is “On track for roll out in the latter part of next year.” During the Q&A it was additionally stated that the software is currently in development and it is not yet in testing. (So the rumors about a current field trial are false.)
“Over the next 4-6 months we will be announcing a number of new features.” TiVo wouldn’t comment on what, exactly, the features are, but it was mentioned a few times that they have a number of innovations in the works and we’ll see them in the next 4-6 months. Teases.
You may have seen the notice earlier today about TiVo coming to Taiwan via TGC. TGC is “TiVo Greater China” and it was founded with the purpose of bringing TiVo to China, Hong Kong, Taiwan, Singapore, and Macao. Earlier announcements stated that TiVo held a “significant minority” of TGC – during the call that was clarified as “over 40%”. Since it is a minority holding, that puts it in the 41-49% bracket.
The call is now available as an MP3 download.
