Are You a DISH Customer With a DISH DVR? Good Luck With That Next Month Pal. Thoughts on TiVo’s First Quarter Earnings Conference Call
Yawn. Not much to report here folks. TiVo beat their earnings number pretty handsomely but it was mostly down due a change in accounting which is likely not reoccurring. They still lost a little over 10 million bucks or so mostly on legal fees, but that’s ok, they’ve got plenty of cash in the bank for the time being. Plus a big judgment sitting out there waiting to be collected.
Probably the most controversial thing on the call was a bit of clarification from TiVo General Council Matt Zinn about what TiVo means when they say that they are asking the courts for an “injunction” against Echostar. According to Zinn, not only do they want all of the existing DISH DVR units that haven’t been sold recalled they actually are asking for the courts to make DISH turn your DVR off if you already have one with them. Yep, enjoy that DVR service, all but about 192,000 of you, maybe for another 30 days and then get ready to go back to watching commercials again. Ouch.
If DISH doesn’t get this one solved pretty quick there are going to be some damn angry DISH customers looking for new service next month I have a feeling.
The tone of the call was pretty anti-Echostar all the way around with both CEO Tom Rogers and Acting CFO Stuart West accusing Echostar of “spin” in the press in the past few days. At the end of the call Zinn outlined some of his thinking as to why TiVo still has a strong case saying that they were still “confident in their case,” while adding that TiVo did not think it wise to elaborate on their thinking on the case at hand. According to Zinn June 26th-28th has been set as the timing on the injunction hearing.
The key points outlined on the call by Rogers were fairly expected. They now have 4.4 million TiVo customers. TiVo is making progress in standalone DVR sales. TiVo is increasingly trying to differentiate their service from generic cheapies (Brightcove, broadband stuff, KidZone, etc.). And that they were continuing a strong push into advertising. Yawn.
So speaking of advertising, TiVo is pushing here like gangbusters, but we already knew this (much to Dave Zatz’s disappointment, wink, wink). According to TiVo so far this fiscal year they have more advertising booked than what they made all of last year. Citing their recent Interpublic deal as well as their new Product Watch initiative, TiVo has seen a lot of growth here — although still not enough growth to represent at least 5% of their revenue and thus it remains still too insignificant for them to breakdown to analysts nor predict when it will become significant enough to do so.
Tony Wible from Citigroup asked Rogers to discuss the popularity of their new pricing plans. Earlier this year TiVo dropped a lifetime service option from their line up and instead customers can either subscribe to a one, two, or three year pricing plan. According to Rogers the most popular choice thus far is the one year commitment plan. TiVo currently charges $19.95 per month for this option or $224 prepaid. The second most popular is the three year option which goes for $16.95 per month or $469 prepaid.
Interestingly enough, although DirecTV is primarily marketing their own DVR technology these days TiVo still sees decent adoption of their HD Unit on the DirecTV platform — enough to offset the units from DirecTV that they lose on the low end. This makes sense to me, of course, as this is the single best DVR on the market at the moment — even with DirecTV’s continuing move from MPEG2 (the technology used by this unit) to MPEG4.
Rogers brought up some of their other recent technologies and partnerships. Their partnership with Verizon (one of the dumbest things I’ve seen in a long time, who in the world is going to *pay* for a service to schedule your TiVo with your cell phone), the recent agreement with Brightcove (“the Wild West of the World Wide Web to the television set,” said Rogers), TiVo’s new Guru Guide, their recent dual tuner DVR (which should have been here a long time ago but they’re glad it’s here now), and the broad political support for KidZone with both Democratic and Republican lawmakers. Whew!
No detailed mention was made of the new multi tuner HDTV standalone TiVo Series 3 box except that the fact that it will be out “later in the year,” consistent with what they’ve said in other recent talks.