Rodriguez TiVo Presentation

8/2/2019 Rodriguez TiVo Presentation

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Zino EgwehJohnny Ferraro

Brittany CulbersonThroy Campbell

Amanda RodriguezHeungsun Lim

TiVo in 2002

Consumer Behavior

MARK 5311


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TABLE OF CONTENTS

Introduction

What is TiVo

TiVo v. Competitors

Dilemma

Consumer Behavior Model Options

Recommendations

TiVo Today

Financials Q & A


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HOME ENTERTAINMENT BEFORE TIVO Satellite and cable channels present a dilemma for

consumers Too many favorite shows, conflicting times, busy lives

Gary Becker and discretionary time How can we maximize the enjoyment of discretionary

time?

VCR Record your shows

Problems Hard to program, not picture perfect clear, does not

allow you to record and play a tape at the same time


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INTRODUCTION Then came TiVo

TiVo was founded in 1997 by Mike Ramsey and JimBarton TiVo revolutionized the home entertainment industry

when it pioneered the DVR technology

PVR=DVR personal/digital video recorder September 30,1999: TiVo made its initial public offering

for $16 per share


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HOW DOES TIVO WORK TiVo captures TV from satellite, cable and air, turns

it into a digital form and stores it in a hard drive(Stephen Wildstrom, Business Week)

DVR allows consumers to record TV programs on ahard disk instead of video cassette (VCR)

TiVo consumers can watch their favorite showsduring leisure time

TiVo consumers can pause live TV, fast forwardthrough commercials, go back for instant replay and

watch programs at a convenient time


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COMPETITION COMPARISON

o TiVo

Has become a verb in households, i.e. I TiVoed that show last night Easier to use according to consumersearch.com WishList feature allows viewer to search for specific actors, directors,

or even sports teams and automatically records them for you Offers parental controls in the form of TiVo Kidzone by pre-screening

programs for age appropriate rating TiVo to-go allows a viewer to transfer recorded material to personal

laptops, other TiVo customers (mainly used for home video) and othermobile devices

TiVo online services allow the viewer to set up and maintain their TiVodigital recording device via internet access. (This feature is onlyavailable on the series 2 and higher, not available at time of casestudy.)

Requires separate TiVo box to be purchased along with monthlyservice fees TiVo season pass allows viewers to record every episode of their

favorite shows whenever they play. Can download rented or purchased movies from Amazon.com (current

market product)


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DVR COMPETITION Many cable, internet providers can provide DVR service without

additional monthly service fees, generally less than that of TiVo

Service can be rented if desired instead of purchased

Many programs do not come with contracts allowing unrestrictedentry and exit from the product

Most cable and satellite TV providers offer this service

Internet providers are offering similar products via the PCwhereby viewers can download straight to the PC hard drive andwatch video wherever they choose

Both TiVo and other DVR products Multiple tuners allow for multiple channel watching and recording

simultaneously

Both offer HD recording products (current market conditions)


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MARKETING STRATEGY Originally very little spent on advertisement

Once the product gained recognition, it would sell itself

Consumers would find a need for TiVo

Relied on customer evangelism

Believed satisfied consumers would persuade others

Expensive

Consumers unwilling to pay $200 for box in addition to monthlysubscription

High-tech VCR

Too much hassle

Families do not want another gadget

Hard to maintain

Spying

PERCEPTIONS OF TiVo


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TOO SMART FOR THEIR OWN GOOD

Pioneers often overthrown by competitors

Its not necessarily being first to market that counts. It's being first to

establish your brand in the minds of your target market that willensure success. But be warned, awareness is not the same asestablishing a brand. Julian Hearn, Brand Strategy Director, Kruder -November 6, 2001

Generic DVRs in abundance

DirecTV

Other cable companies offering DVR bundled with

cable box Loss of market share

Unable to turn a profit

Not enough customers to offset costs


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BEHAVIORAL MODEL In an attempt to better understand and satisfy consumers needs and

wants, TiVo conducted surveys which provided primary information.

Responses enable TiVo to analyze internal and external influences, whichimpact customers self concept and lifestyle.

The consumers way of life result in needs and wants, which begins thedecision making process. Acquisition of and experience with the personalvideo recorder (PVR) impacts persons lifestyle and ultimately furtherpurchases and product loyalty.

Information was gathered using a biannual consumer survey, attitudesurvey and logs provided through consumer usage of the PVR.

Satisfaction, Usability and Demographics

Viewing Habits, Life with TiVo, TiVo vs. Technological Gadgets, Fun Facts

Diagnostic data

Discussed by using Dr. Rogers Consumer Behavioral model

Consumer Biannual Survey:

Attitude Survey:

TiVo Logs:


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Internal(psychological)

External(sociological)

culture

social class

reference groups

family

marketing mix

needs

motives

wants

awareness perception attitude preference

b

e

h

av

i

o

r

learning

personality

BEHAVIORAL MODEL

S

a

t

is

f

a

c

t

io

n

U

s

a

bi

l

i

t

yDemographics

Tech Gadgets

Diagnostic Data

Diagnostic Data

Tech Gadgets

Viewing Habits

Fun FactsDemographics


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BEHAVIORAL MODEL External (Sociology)

Demographics 78% of subscribers were 2554 age group which comprise 60% of population

Families with young children are well represented

71% of subscribers are home owners; professionals with upper management occupations

Internal (Psychology)

TiVo vs. Technological Gadgets Compared to microwave (unavoidable component of everyones home)

Personality & Perception Viewing Habits

69% of subscribers watched more television with TiVo

Life with TiVo TiVo impacted viewers day to day personal life and interactions with others

Fun Facts 96% of users find it frustrating to watch television without TiVo

Behavior

Usability 89% perceived TiVos easy to use

95.1% found the Trick Play (pause, rewind, fast forward)

Satisfaction

90% of customers were satisfied with TiVo and 96.4% would recommend


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OPTIONS

Product Strategies

Sell technology Develop unit that contains TiVo software and cable/satellite

box in one Develop more features that appeal to public Develop a lower-end/more generic unit that is more

affordable to company and public

Develop software that more accurately tracks and analyzessubscriber data (demographics, programs watched,commercials watched/skipped, etc.) and sell to marketingcompanies

Protect valuable patents

Distribution Strategies Sell standalone units at more electronic and super stores License software with all cable/satellite television services


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MORE OPTIONS

Promotion Strategies Reevaluate advertising dollars and reallocate dollars to

television ads during most watched shows, major sportingevents and sweeps months

Cut advertising budget

Offer coupons/rebates on standalone unit purchase

Offer free product trial on lower-end units Offer incentives to subscribers who influence enrollment of

friends/family

Offer free set up and training to subscribers

Pricing Strategies Immediately cut price on standalone units

Eliminate initial purchase of standalone unit andincrease monthly subscription price for unit rental


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RECOMMENDATIONS

Develop a lower-end/more generic unit

Immediately cut price on standalone units Offer rental contract on standalone units

License software to cable/satellite televisionproviders

Begin aggressive promotion programs Refer-A-Friend and save!

70% of TiVo purchasers knew someone with TiVo prior topurchase

68% of TiVo purchasers were influenced in part by friends

Free trials, coupons and/or rebates Life is better with TiVo.

TiVo more important than everything but my children

Ranks more important than VCR, MP3 player, videocamcorder, digital camera, DVD player, PDA


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TRYING TO EXPAND MARKET Bolsters international presence with launch of TiVo service at retail in Canada

Develop a software solution that will bring the TiVo experience to users

receiving their television signals through a computer Broaden relationship with NCTA

ANNOUNCED RELATIONSHIP WITH NCTA Solidifying relationships with the cable industry, ensuring easier installation of

Cable CARD products and underscoring the cable industry's recognition ofTiVo's importance to their subscribers

Comcast, Wind stream Communications, Jaman.com, Music Choice Network

INTERACTIVE ADVERTISING &

AUDIENCE RESEARCH PARTNERSHIP Stop//Watch(TM) Rating Service to NBC & CBS

Power//Watch(TM) Consumer Panel to Starcom & Carat


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SUBSCRIBER NUMBERS

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

Oct31,2007

July31,2007

April30,2007

Jan31,2007

Oct31,2006

July31,2006 April

30,2006 Jan31,2006

MSOs/Broadcasters

TiVo owned


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CONTINUED POOR EARNINGS

As Reported Annual Income Statement 1/31/2007 1/31/2006 1/31/2005 1/31/2004 1/31/2003Service & technology revenues 217,985 170,859 115,476 77,357 60,170

Hardware revenues 88,740 72,093 111,275 72,882 45,620

Research & development expense 50,728 41,087 37,634 22,167 20,714

Sales & marketing expense 42,955 35,047 37,367 18,947 17,629

Net income (loss) -47,754 -34,398 -79,842 -32,018 -80,596

0

100,000

200,000

300,000

Service & technologyrevenues

Hardware revenues


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STAGNATED STOCK PRICE


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Q&A

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Rodriguez TiVo Presentation

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