• by Paul Gough , March 10, 2003

TiVo isn’t worried about the spate of PVR-like devices that are spreading into the marketplace. The company is planning to stay ahead of the pack by offering premium services.

CEO Michael Ramsay outlined Thursday a growth plan that would give it more than a million subscribers by the end of the year. The subscriber base has grown 64% in a year to stand at 624,000. A strong holiday season added 115,000 subscribers.

Ramsay said he hears all the time from people who wonder whether TiVo will lose out with the commoditization of PVRs or a point in the future when every set-top box has a recording feature. But he said cable operators’ focus on the recording aspects gave plenty of room for TiVo to offer the services that its customers want. He said customer service and features were what will keep TiVo on top.

“Consumer products with only hard drives are simply not going to deliver on the potential,” Ramsay said.

The company expects another big holiday season, fueled by pacts with DirecTV, consumer-electronics makers like Toshiba and Sony, and a new DVD/DVR that’s pretty big in Japan right now.

“DVR is just the starting point,” Ramsay said.

In the spring, TiVo will make its first foray into home networking, providing a way for its devices to enable broadband and other home entertainment systems.

TiVo narrowed its quarterly loss to $14.7 million from $42 million the same period a year ago. The company hopes to break even by the end of the year.

A deal with DirecTV to produce a TiVo-branded DVR and TiVo’s first foray into retail stores were successful. CFO David Courtney said DirecTV expected it would have sold more if more had been produced and that in some areas of the country, there were waiting lists of several hundred people for the retail versions. He said these supply issues harmed TiVo sales more than the weak economy.

Ramsay ruled out DirecTV-style deals with cable operators, at least for the time being. He said the growth wouldn’t justify the costs, saying that its efforts with consumer electronics makers and DirecTV appeared to make more sense now. But he said that with another year of growth under its belt, TiVo would be well positioned for cable deals.

Advertising has become a growing source of revenue, with Ramsay expecting that this year will be the first with significant revenue from its advertising, promotions and audience measurement services. He said these efforts have reached “critical mass” with deals to distribute content from 20th Century Fox, New Line Cinema, Sony Pictures and Universal Music, among others.