More Very Meaty TiVo/Comcast Deal Analysis
Jeff Macke is out with an article today entitled “TiVo Thoughts After the Comcast Deal” that provides some of the meatiest analysis I’ve seen yet.
Unfortunately Macke publishes at Minyanville.com which is a pretty expensive pay for content site so I’ll try to summarize and expound on some of his key points and quote liberally.
Macke’s tagline on the piece is, “I’m going to be obsessive about TiVo anyway so I might as well share.”
The power of TiVo has always been in a strange way a chicken and an egg problem. In order to love TiVo you need to try it and buy it. In order to try it and buy it, you need to know that you are going to love it. One thing about TiVo users though is that they are sticky -- apparently very sticky. For the fiercest TiVo owners they treat their TiVo like a religion – it can be their third child, it can be more addictive than blogging, it can be more addictive than crack.
On the other hand, the cable and satellite companies largely produce shitty PVRs. They have limited storage, lack the more innovative features that TiVo beat them to patent on and while these cheap freebie DVRs may be “good enough” for the uninitiated average Joe they are an unthinkable step back to those who have tasted the nectar that is TiVo.
According to Macke, the brilliance of the TiVo deal for Comcast comes down to a single issue, “churn.” Or as Macke writes, “For every season, Churn, Churn, Churn.”
And churn is where the value of the TiVo deal exists for Comcast according to Macke. Churn is what happens when you say, screw Comcast, I’m going to DirecTV. Or screw DirecTV I’m going to Dish. Or screw Voom (or should I say get screwed by Voom) I’m going to Comcast. And churn costs cable operators and satellite companies money. Basically it costs them about $800 to get you as a customer in the first place, according to Macke. They’d like to keep you. They’d much prefer that long-term cozy relationship with you where you keep giving them your money month after month after month – even if you can’t tell it by the way that they treat you on the telephone.
According to Macke the churn rate for DirecTV/TiVo users is .2% per month. “That’s one full percentage point lower than the levels of churn for Comcast DVR
customers (to take one example and please note that this rate isn’t stated
openly by Comcast or any other cable cos… but it can be worked out from the
information they do give).”
Macke does some back of the envelope math and concludes that by reducing churn 1% that Comcast would save about $60 million per month – that’s a lot of dough. And although Comcast probably is reluctant to actually pay TiVo the money to include them, they recognize that their own lame engineers have come nowhere close to matching TiVo’s offering and it’s still gonna cost ‘em to build something in house anyway.
Macke gets inside of the head of a cable operator and puts it this way, “"My generic DVR customers are churning at 1.2% and I'm giving boxes away for free to get customers. DirecTV is stomping me on customer adds and is getting .2% churn out of their TiVo users. I want some of that but I don't like TiVo and don't want to pay them.
"Then again, my tech guys are asking for $50 million more for another upgrade of
our TiVo knock-off that my tech guys swore could be re-created 'in a week of
work, tops'. I'm sick of dealing with that mess and if Echostar (DISH) loses in
court to TiVo I'll end up paying anyway.
"I'm going to suck it up and pay TiVo then knock the snot out of DTV in ads
promoting it. At worst, it nullifies DTV's TiVo advantage (which I don't think
is the sole reason for he difference in churn but millions of dollars into
trying to knock them off, I'm open to ideas). If DTV totally dumps TiVo I'll be
alone with the DVR my idiot customers want for whatever reason.
"Either way, I can pay TiVo a buck a month then charge customers who use it $10
and make them pay for the set-top box. Seems hard for me to lose."
Macke, who as one who is long TiVo stock definitely might have some interest in seeing the stock go up, goes on to offer some interesting responses to those who are short TiVo stock, but I’m probably going to have to make you pay minyanville.com to get that information.
The one question that I still have though is if the TiVo deal is such a hot deal with regards to customer retention, then why in the heck is DirecTV giving them the cold shoulder? Another question I have is I wonder what the churn rate on the Microsoft Foundation box is for the trial that is currently being run in Washington state by Comcast. It would be interesting to compare and contrast the .2% TiVo DirecTV churn rate with whatever churn rate Comcast is seeing with Foundation. Foundation has a pretty superior UI and feature set compared to the standard Comcast DVR and even more significantly it records HDTV. Of course I'd imagine that the new Comcast TiVo offering will most likely include HDTV recording.
Overall Macke offers a very interesting new twist on the TiVo argument that I had not heard yet. What do you think? Any merit to his idea?
posted by Thomas Hawk at 2:15 PM
8 Comments:
I bet DTV's lower churn rate has more to do with consumers plopping down a grand for the box then it does with the TIVO service. If cable was smart they wouldn't rent their boxes, they would adopt the cell phone industry's strategy of requiring two year subscriptions for a free tivo box.
The "paying $1,000 for TiVo box" argument isn't based on facts. At LEAST 90% of Directv's TiVo customers are running standard DTV/TiVo boxes. These people all paid less than $200 for their DVR. Many of them got the DVR free in an install promotion.
Churn is one reason Comcast did the deal. Another is that all of the work is on TiVo's side. Comcast says "make it work with our boxes." TiVo does all the work and Comcast keeps all of the money. Seems pretty straightforward to me.
Carl,
It's fair enough to say that the reduced churn has nothing to do with the boxes because you are correct that dtivo has sold more non-hdtv boxes (although I suspect the mix is closer to 25 hdtv and 75 regular, but have no data to base my assumptions on.) Directv does however require an annual subscribtion for the cheap Tivo boxes. I guess that my point was that if someone owns something, it becomes an obstacle to change regardless of how much they paid for it. Because Comcast has chosen to rent their boxes, it will make it difficult for them to upgrade to larger hard drives and multi tuner's as they became more available. Instead of forcing consumer to upgrade, they instead will be left with a bunch of boxes that they won't be able to even give away (Is anyone in the market for windows 98 PC?) Directv, shouldn't have too much trouble upgrading because their client base assumes ownership.
These guys are on the right track. Comcast is going to have higher churn for a couple of reasons. One, DirecTV customers buy their equipment. Comcast customers don't. This probably accounts for a big whack of that 1% difference. (Although I think he's way off base with the 25% HDTV box. I can't imagine that TiVo is selling hundreds of thousands of HDTV boxes. Most consumers just don't have that kind of moolah to sink into a PVR.) Second, Comcast is losing customers to satellite anyway. Satellite is currently net gaining on these defections. The churn would therefore be skewed in their favor due to marketwide customer migrations, not TiVo boxes. I think stickiness has something to do with it, but I'm not sure it's as big a deal as it appears to be in this article (although I'm commenting on the paraphrase, not the actual article. I'm not that rich either...)
Gotta admit I'm a Tivo lover! I've had one since late 2000 (standalone on analog cable then) and a dual-tuner DTV Tivo for a little over a year.
I took Comcast up on a dump your dish promotion a few weeks ago (previously my townhouse complex had a sucky small cable provider) to get cable modem, etc for a great bundle. I'm in Washington so I got the Microsoft Foundation DVR, BUT I didn't actually turn off the DTV yet.
Short story, while I'm was a long-time Tivo fan, I was willing to drop it for generic DVR to get Comcast, good deal (multiproduct discount with cable modem, etc)...
However, after about two weeks, I can't stand it. I'm going to keep the cable modem and dump the Comcast TV (even at cheaper per month for a year with HBO than standard DTV). The DVR doesn't remotely compare.
I could live with the weaker ad-heavy user interface (Tivo easily kills the MSFT box in this area), Tivo suggestions I was willing to forgo, but I can't live with the lousy dual-tuner support (no swap button on MSFT box), remote with a puny signal (button presses don't take effect half the time, I can't tell if it's the remote or the DVR being unresponsive), and just plain overall poor usability. I though convincing my wife to give up Tivo would be the big obstacle, turns out I won't even do it!
I was surprised because after the long-time Windows versus Mac user interface lawsuits, etc, I thought MSFT knew a lot about "cloning" a good UI.
With the recent Comcast Tivo deal (and the DTV Tivo deal phasing out), I figure I'll probably switch back to Comcast cable in about a year when they have a new Tivo box (hopefully a big upgrade versus the current DTV Tivo!).
To be fair, I don't use HDTV (which is the only clear advantage I can see versus the commodity DTV dual-tuner Tivos), so that Comcast price advantage was lost on me.
Maybe I can at least get some kind of deal for the next year out of DTV rention... we'll see..
runescape accounts buy runescape accounts rs2 accounts buy rs2 accounts runescape accounts buy runescape accounts rs2 accounts buy rs2 accounts runescape power leveling rs2 power leveling runescape power leveling rs2 power leveling
心中一阵不安升降机，因为我忽然又想起了那道剑光升降平台，可怕的剑光升降台，美丽的剑光登车桥。为什么那一剑是那么的美丽货架，却又那么的可怕呢集装袋？在我倒下之前我说地磅，好美的剑塑料托盘，好恨的剑塑料托盘。我倒下了仓储笼。在我失去知觉之前仓储笼，我听到他说北京货架，这叫艺术超市货架，剑的艺术北京货架。
我并没有死广州货架，原来我的心是在右边仓储货架，而是不是左边货架厂。所以在那穿胸一剑之下我并没有死南京货架。
是一阵暴雨把我冲醒了货架公司。听说雨是上天的眼泪深圳货架，也许这天又有人死在那美丽的剑光之下吧服装货架！我张开嘴巴托盘，任雨水打进我的嘴托盘，直冲我的胃塑料托盘。我的伤口又开始流血塑料托盘，但已经不痛了木托盘。试问：仓储笼一个心已经死了的人仓储笼，肉体上的疼痛又算得了什么呢仓储笼？我知道我的刀再练一百年也无法那么美丽仓储笼，那么恨托盘，而且永远别想杀了他托盘。
我退出江湖了手推车，我没有通知江湖上的朋友们静音手推车，并来一个什么金盆洗手静音手推车，因为我的朋友们差不多都被他杀了置物架。我悄悄的走了置物架，隐进了山林之中堆垛架。俨然一个世外高人的样子堆垛架，每天一壶绿茶登高车，放在身边的几上登高车，然后或盯着一朵白云超市手推车，或盯着一片树叶物流手推车，或双目紧闭物流台车。我的刀在玉盆中泡了七七四十九天角钢货架，已经没有血腥味了角钢货架。然后我把它放在我的屋顶轻型货架，任它风吹雨打轻型货架。
十年就这年过去了中型货架。为何今天天忽然想起那柄剑中型货架，那道剑光重型货架？而且内心为什么如此不安重型货架？不应该是这样的仓库货架，对于一个喝了十年绿茶的人来说服装货架，面对死上海货架，也已不再惧怕精品货架，不再不安苏州货架，但今天又为何如此呢托盘货架？
莫非是他青岛货架，和他的剑库房货架，加上他的剑光沈阳货架。我已不问江湖之事天津货架，想他十年前也应该坐上武林盟主的位子了杭州货架，一个武林中人做了武林盟主山东货架，这一生还有什么要求的呢文件柜？
我不停的喝着绿茶工具柜。绿茶静心工具柜。但此时怎么也静不下来零件柜。茶已尽工作台。平时茶尽之时工作台，正也是日落之时工作桌。
一定快有什么事情发生了工作桌。
剑还是那美丽的剑Google左侧排名，如果再加上一道剑光吹塑机，就会形成剑的艺术色带，武学的艺术电源插座。
我问反光背心：为何还来找我滚针轴承，我已在十年之前就退出江湖了夜光粉。
他说文化石：因为你没死缎带，因为我没有对手风火轮。
我说激光打标机：十年前已不是你的对手平衡机，何况现在十年未动刀大功率led。
他说磁力泵：放眼天下梯子，只有你一个人是我的对手网眼袋，也只你一个人对我的威胁无尘布。
我不再说话手摇手电筒，因为我不知道说什么手板，我知道我十年前就开始找我毛巾布，发现我没有死就开始找我磁钢。我不死促销台，他心不安模具钢材。
他说时尚配饰：拿出你的刀筛网。
我说齿轮泵：我已无刀天使花房，命托辊，亦可有可无色丁。
他盯着我广告衫，握剑的手越来越紧钢坯，我知道那道美丽的剑光可能随时发出过滤网。在那美丽过后疏水阀，我的生命将画上句号胸章。
阳光照在了刀上发热管，反射到他的脸上手机耳机。他发现了那把刀螺杆，我的刀插销，宝刀蝴蝶，没有鞘的刀工具包。
刀已在我手中点钞机，刀还是那把刀配电箱，人却已不是那个人流苏，因为心不是那颗心沙滩巾。
他为了杀我竟找了我十年氯化镁，而为了和我比武竟帮我从屋顶拿下我的刀来双面胶带，并放在我的手中碳纤维。我忽然发现排线，他也变了汽车座垫，他在后悔十年前将所有高手都杀绝珍珠奶茶。
高手的悲哀太阳伞。
我握紧了刀桥架，我看着他的眼tpr，已经不再像十年前那样明亮了钢丝。
他的剑划出柴油发电机组，划出一道美丽的剑光护栏。我想围栏，这十年他大概在不停地使自己的剑光更美围栏。
我的刀也出了隔离网。简单的动作隔离网，一刀刺进了他的胸网片。那道美丽的光忽然停止网片，停在我的衣服上南京货架。
他说北京货架：这也是艺术北京货架，杀人的艺术北京货架，想不到你十年不动刀还懂这个艺术仓储货架。
我说仓储货架：因为我不想再让你痛苦了广州货架。
他说广州货架：谢谢货架厂。
我走了货架公司。我头也不回的走了塑料托盘。没有取回我的刀塑料托盘，因为我觉得它在我身边已经没用塑料托盘，我后悔我十年前为什么不扔了它塑料托盘？我听到了尸体倒下的声音塑料托盘。我流泪了塑料托盘，我真的不想杀他仓储笼，十年前不想仓储笼，十年后也不想仓储笼，因为我下山时答应过师父仓储笼，一切让着他仓储笼。
我叹了一口气仓储笼。远去仓储笼。
心中一阵不安升降机，因为我忽然又想起了那道剑光升降平台，可怕的剑光升降台，美丽的剑光登车桥。为什么那一剑是那么的美丽货架，却又那么的可怕呢集装袋？在我倒下之前我说地磅，好美的剑塑料托盘，好恨的剑塑料托盘。我倒下了仓储笼。在我失去知觉之前仓储笼，我听到他说北京货架，这叫艺术超市货架，剑的艺术北京货架。
我并没有死广州货架，原来我的心是在右边仓储货架，而是不是左边货架厂。所以在那穿胸一剑之下我并没有死南京货架。
是一阵暴雨把我冲醒了货架公司。听说雨是上天的眼泪深圳货架，也许这天又有人死在那美丽的剑光之下吧服装货架！我张开嘴巴托盘，任雨水打进我的嘴托盘，直冲我的胃塑料托盘。我的伤口又开始流血塑料托盘，但已经不痛了木托盘。试问：仓储笼一个心已经死了的人仓储笼，肉体上的疼痛又算得了什么呢仓储笼？我知道我的刀再练一百年也无法那么美丽仓储笼，那么恨托盘，而且永远别想杀了他托盘。
我退出江湖了手推车，我没有通知江湖上的朋友们静音手推车，并来一个什么金盆洗手静音手推车，因为我的朋友们差不多都被他杀了置物架。我悄悄的走了置物架，隐进了山林之中堆垛架。俨然一个世外高人的样子堆垛架，每天一壶绿茶登高车，放在身边的几上登高车，然后或盯着一朵白云超市手推车，或盯着一片树叶物流手推车，或双目紧闭物流台车。我的刀在玉盆中泡了七七四十九天角钢货架，已经没有血腥味了角钢货架。然后我把它放在我的屋顶轻型货架，任它风吹雨打轻型货架。
十年就这年过去了中型货架。为何今天天忽然想起那柄剑中型货架，那道剑光重型货架？而且内心为什么如此不安重型货架？不应该是这样的仓库货架，对于一个喝了十年绿茶的人来说服装货架，面对死上海货架，也已不再惧怕精品货架，不再不安苏州货架，但今天又为何如此呢托盘货架？
莫非是他青岛货架，和他的剑库房货架，加上他的剑光沈阳货架。我已不问江湖之事天津货架，想他十年前也应该坐上武林盟主的位子了杭州货架，一个武林中人做了武林盟主山东货架，这一生还有什么要求的呢文件柜？
我不停的喝着绿茶工具柜。绿茶静心工具柜。但此时怎么也静不下来零件柜。茶已尽工作台。平时茶尽之时工作台，正也是日落之时工作桌。
一定快有什么事情发生了工作桌。
剑还是那美丽的剑Google左侧排名，如果再加上一道剑光吹塑机，就会形成剑的艺术色带，武学的艺术电源插座。
我问反光背心：为何还来找我滚针轴承，我已在十年之前就退出江湖了夜光粉。
他说文化石：因为你没死缎带，因为我没有对手风火轮。
我说激光打标机：十年前已不是你的对手平衡机，何况现在十年未动刀大功率led。
他说磁力泵：放眼天下梯子，只有你一个人是我的对手网眼袋，也只你一个人对我的威胁无尘布。
我不再说话手摇手电筒，因为我不知道说什么手板，我知道我十年前就开始找我毛巾布，发现我没有死就开始找我磁钢。我不死促销台，他心不安模具钢材。
他说时尚配饰：拿出你的刀筛网。
我说齿轮泵：我已无刀天使花房，命托辊，亦可有可无色丁。
他盯着我广告衫，握剑的手越来越紧钢坯，我知道那道美丽的剑光可能随时发出过滤网。在那美丽过后疏水阀，我的生命将画上句号胸章。
阳光照在了刀上发热管，反射到他的脸上手机耳机。他发现了那把刀螺杆，我的刀插销，宝刀蝴蝶，没有鞘的刀工具包。
刀已在我手中点钞机，刀还是那把刀配电箱，人却已不是那个人流苏，因为心不是那颗心沙滩巾。
他为了杀我竟找了我十年氯化镁，而为了和我比武竟帮我从屋顶拿下我的刀来双面胶带，并放在我的手中碳纤维。我忽然发现排线，他也变了汽车座垫，他在后悔十年前将所有高手都杀绝珍珠奶茶。
高手的悲哀太阳伞。
我握紧了刀桥架，我看着他的眼tpr，已经不再像十年前那样明亮了钢丝。
他的剑划出柴油发电机组，划出一道美丽的剑光护栏。我想围栏，这十年他大概在不停地使自己的剑光更美围栏。
我的刀也出了隔离网。简单的动作隔离网，一刀刺进了他的胸网片。那道美丽的光忽然停止网片，停在我的衣服上南京货架。
他说北京货架：这也是艺术北京货架，杀人的艺术北京货架，想不到你十年不动刀还懂这个艺术仓储货架。
我说仓储货架：因为我不想再让你痛苦了广州货架。
他说广州货架：谢谢货架厂。
我走了货架公司。我头也不回的走了塑料托盘。没有取回我的刀塑料托盘，因为我觉得它在我身边已经没用塑料托盘，我后悔我十年前为什么不扔了它塑料托盘？我听到了尸体倒下的声音塑料托盘。我流泪了塑料托盘，我真的不想杀他仓储笼，十年前不想仓储笼，十年后也不想仓储笼，因为我下山时答应过师父仓储笼，一切让着他仓储笼。
我叹了一口气仓储笼。远去仓储笼。
Post a Comment
Links to this post:
Create a Link
<< Home