TiVo May Go Free-o, Give DVRs Away

With a focus on the financial model of the mobile phone business for success, TiVo Inc. may experiment with the idea of giving away set-top boxes as a plan to attract subscribers.

Speaking at a Reuters media conference in New York, TiVo's CEO Tom Rogers said the company is considering a number of pricing options, including one that would include giving away free set-top DVR boxes.

This would be one part of a pricing package in which subscribers--as with mobile phone companies--would need to sign up for one or two-year contracts. Rogers said these deals would be priced at a higher monthly fee than it currently sells its service.

TiVo's current service runs about $13 a month; consumers must purchase a DVR unit as well. Right now the company is offering an 80-hour DVR for $69.99. In previous consumer pricing deals made years ago, TiVo made many long-term agreements that gave subscribers the opportunity to purchase a digital recorder box and lifetime service contract for a price ranging from $200 to $400.



Now, following in the footsteps of some mobile phone companies, as well as some cable companies, TiVo is looking to price deals with upfront hardware that costs little or nothing. Many cable operators and former partner DirecTV Group are now in competition with TiVo to sell service and equipment. Some devices are more powerful than TiVo's, and are offered free or at lower prices.

TiVo currently serves about 4 million subscribers; about two-thirds of them have come from DirecTV. Wall Street has been pressuring TiVo to expand its customer base.

TiVo has major brand awareness among consumers--a major positive for the company. Critics also say TiVo is superior in terms of its DVR software.

In the future, Rogers looks to a time when existing set-top boxes made by other manufacturers can be upgraded by software, with no purchase necessary by the consumer. This could allow TiVo to gain more business from consumers.

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