Showtime For Digital Video Recorders?

from the come-and-get-'em dept

Fri, Jan 18th 2002 9:55am — Mike Masnick

Many people are saying that digital video recorders like the Tivo finally turned the corner this past holiday season. Many stores found that they couldn't keep up with demand. Of course, I think this might have had something to do with Tivo dropping the prices to next to nothing. However, I think that was a smart move, simply because everyone seems to be judging Tivo's success on how many customers they have - and not on profits (uh oh, that sounds familiar...). However, as more and more people get Tivo-like devices, I get the feeling it will encourage even more people to get them. Anyone (such as myself) who sees friends who have Tivos starts to get that yearning feeling to buy one themself. Either that, or they start calling up their friends at random times saying "oh, so I missed such-and-such on TV last week, and I'm coming over to watch it on your Tivo". Not that I would do such a thing. Or, well, not often. Well, at least I try to spread it around among different friends and different Tivos. And only until I buy one myself. Seriously.

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bcd, 18 Jan 2002 @ 2:46pm

ummm - wrong
However, I think that was a smart move, simply because everyone seems to be judging Tivo's success on how many customers they have - and not on profits (uh oh, that sounds familiar...).
TiVo operates on the recurring revenue model - think razor vs. blades. they charge $9.99 a month to receive the service guide and their profit models are based on a large install base using the service - think cell phones.
as a matter of fact, it was TiVo's goal to greatly increase the base, even if losing money on the unit - think consoles like PS2 and Xbox - so that they could ink deals with other major players, eg Real Networks.
[ link to this | view in chronology ]
- Mike (profile), 18 Jan 2002 @ 3:50pm
  
  Re: ummm - wrong
  Yeah, I understand how that works. However, there isn't really proof that the service fees will end up paying off for them. I agree, though, if I were them I'd be giving the stupid boxes away. Why bother charging at all?
  [ link to this | view in chronology ]