• by Paul Gough , November 4, 2003

Despite industry skepticism about its long-term survival as a standalone digital video recording service, TiVo reached the one-million subscription mark ahead of schedule thanks to its rollout with satellite provider DirecTV.

The news was expected but even TiVo's public pronouncements hadn't predicted it would reach a million so soon. On July 31, TiVo had 793,000 subscribers and back then TiVo Chief Executive Officer Michael Ramsay forecasted his company would hit the one-million mark sometime during the holiday season. But Tuesday, Ramsey credited TiVo's growth among DirecTV subscribers as the driving force.

It's part of TiVo's shift from being the set-top box source for digital video recording to licensing the technology to so far eight consumer electronics manufacturers and offering the services on a subscription basis. Toshiba and Pioneer are offering DVD players with TiVo functionality and DirectTV has in the past several months made a big marketing push on TiVo-enabled boxes.

In the quarter ended July 31 - halfway through TiVo's fiscal year - subscriptions among DirecTV users had outpaced standalone purchases of the service. There were 56,000 new DirecTV users on board, compared to 34,000 standalone subscriptions. Both areas were up sharply in the quarter and, in August, TiVo said it expected to add 550,000 to 650,000 new subscriptions for the fiscal year that will end on Jan. 31, 2004. It hasn't updated guidance with this latest development.

In holiday seasons past, TiVo was the hot new gift of choice among early adopters but the company suffered from some distribution woes that made it hard to find in retail stores. TiVo has worked hard to change that, putting it in more retail channels than ever before plus offering its Series 2 unit online at its own Web site and also through Amazon.com.