Why TiVo Should Drop Its Price To Free

from the interesting-ideas dept

I often wonder about business models that try to get money out of both ends of what they’re selling. I have no problem with companies profiting off of whatever they’re selling, but I sometimes think that in their desperation to charge for everything – they miss the broader opportunities. Clearly, giving away something for free with no other business model in mind doesn’t make any sense – but realizing that giving away something for free can help build a much larger market for a related offering can be a much smarter move. For example, the adoption of the TiVo has been pretty slow. It hasn’t been terrible, and it’s been picking up lately, but the combination of an upfront price and a service fee contributes to the slower adoption. Now, EchoStar has changed the game: they’re giving away a 100-hour digital video recorder for free – though, they’re charging higher service fees to use it. This way they convince a lot more people to get the device into their homes, and then make up the money on the service fees. It’s a smart business model, and some are suggesting that it’s about time TiVo thought along the same lines. I’m sure plenty of people would have signed up for TiVo years ago if the box was free and they just had to pay a service charge.

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Comments on “Why TiVo Should Drop Its Price To Free”

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anon says:

Re: Adoption of Technology

I dont think this would work in Tivos case. The problem is people HATE paying service fee’s for stuff their not used to paying for.. Look at Divx and ask why that failed. If the tivo service was free then I think you would find allot more PVR’s sold. I think it is the service fee that is holding people back (it is for me)
It is differnt if it was the cable company or directv charging the fee. People are used to paying these companies extra money for things like, hbo, or pay per view.

Nate says:

It was attempted

ReplayTV started out with charging only for the box and the service came with it “free”. They have since turned around and gone the route of Tivo. Tivo also had the “Lifetime” option which doubled the price of the unit.

I have two units in the house and will continue to pay for the service as long as it is there and I am able. I think it would mean divorce if I didn’t, but that’s beside the point.

I couldn’t tell you the last time I actually watched a program at the time that the TV Guide said it was on. We are not a slave to timeslots, nor do we watch commercials (except for the really good ones..we will actually watch those a few times).


Kevin says:

Re: It was attempted

Watch out of the “lifetime” subscription. It only applies to a particular box, and if that box gets fried you cant transfer it over, its true, I asked them. Maybe they got smart and changed that policy.

Also, the modem, at least on the phillips one, fried very easily when lightning struck near by. So if I had a lifetime on that box, I would have had to send it in, get it repaired for who knows how much, and it would have taken who knows how long. I didnt have lifetime so I just threw it away and bought a display model at a circuit city for a hundred bucks.

Dont get me wrong, I worship tivo, tivo is a tiny god, I couldnt live without it.

gary says:

that would piss me off a lot less

TiVo charged me $200 for their TV guide service and then they turn around and download ads on MY Digital Video Recorder and then they have the gull to sell information mined from MY property. This company has totally pissed me off.

On the other hand, if they actually gave me something, maybe I would be more receptive to letting them make some money off my ass.

What really pissed me off is that they sent a new privacy policy to my machine. What the F is the point of that??? I didn’t bother reading it. Why should I? They have it backwards, they should be signing a privacy policy that I sent to them. It’s my machine and I gave them some trust that has been violated.

Nate says:

Re: that would piss me off a lot less

Simple solution. Unplug the device and not use it. Easy. You obviously are online, how about heading over to tivo.com and, I don’t know…OPT OUT of the uploads. It’s simple, you could have done it at the time of signup.

The ads are not “downloaded” onto the machine by any means. They are actually received by the machine via a special set of tv programs played at a particular time in the middle of the night that has been specially encoded so that the TiVo knows how to split the video into segments. If you don’t like to watch the ads, don’t choose them with the remote. Not one of them has ever been made mandatory since I have had my TiVo’s (early 2000 I believe it was).

TiVo is giving you something, in the form of a very easy/exciting way to watch TV on your own terms and not on the studio’s terms. I’ll take the extra star icon on my menu screen for that.

You might want to read that privacy policy (it’s available online)..apparently you missed the one during your initial signup.

Munich says:

Re: Re: And some of the "ads" are okay

Whoever above called their Tivo a minature god has my second. I have had mine less than a year and am wondering what I did without it. The main reason I got it was to skip commercials, which has been great, and about the only time I ever watch “live” TV now is sporting events.

As for the downloaded ads, I ignore the “star” except for the movie trailers. This is one form of advertising I don’t mind and the only outlet has been movie theaters themselves or on-line, which can be pretty slow. The first time I saw one of these downloaded into the Tivo I thought it was a pretty good idea.

As for sharing my information, I think of this as “voting” on my favorite programs/programming, which will hopefully get me more of what I like. Since I WANT Tivo to stay in business, if they can make money off my tastes, more power to them.

Marc H. Nathan (user link) says:

Tivo Service

I think that giving away the service is killing the goose that lays the golden egg. Actually, I wish that Tivo would sell their service separate from the hardware in retail stores and online for Home Media PC’s or whatever DIY box could meet the requirements. This way they could receive revenue by relying on retail software cycles, but without the logistic and customer service headaches of a hardware manufacturer. This would also allow them to become the standard “OS” for televison, have a developer base as strong as Palm’s used to have (which would also legitmize the tivo “hackers”), and change the way that advertising is sold by sharing a corner “bug” or a stock-ticker like ad scroll on the bottom of every show that is recorded.
It’s also very true that Americans in general like “buffet-style” all-you-can-eat pricing. But I really don’t think that it’s the service contract that has stopped more people from adopting it. It’s the same reason that HDTV has and will have a slow adoption period: regular TV might not be perfect, but it is “good enough” at the price most people are comfortable with today.
Also, like most of the people that have responded to this post, I am a huge fan, can honestly say that Tivo has changed my life.

MBD says:

I don't get it

I started considering Tivo because I want a set-top box that I can play my Netflix videos on. I have a Cox DVR now, and I just don’t understand what you get for your 12 bucks a month service. I’m sure it’s not much more than Cox charges me, but with them I don’t have to pay for the box. Charge me for one or the other, but not both.

Most of the people here and elsewhere say they love Tivo, but the things they love about it are true of any DVR. So what’s so different about Tivo that makes it worth shelling out several hundred bucks up front AND more on a monthly basis as well?

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