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.

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8 Comments

  1. Paul L. McCord Jr. says:

    I am not a typical customer I guess because I will not be looking for another provider. In fact, when people do things like this, it makes me go out of my way to avoid the perpetrator. This will make me avoid things that have anything to do with Tivo. I am a happy Dish Network customer and will not leave them to go to DirecTV to get Tivo. I would rather do without than to have some company tell me who I can do business with. This business of sue sue sue when you can’t sell products is against the laws of economics. Just my opinion.
    Paul

  2. Phil says:

    I am so glad I got the lifetime Tivo subscription now… good grief. That and they no longer offer it….

  3. The Jamoker says:

    I have DISH. I’ll pass along news of whatever they do.

  4. Anonymous says:

    $19.95 a month?! That’s just for the guide service? Then I have to lay out $150, upfront, for the dual-tuner DVR?

    Or I can just give my cable company $15 a month for everything, and let them worry about install and maintainence on it?

  5. MegaZone says:

    Paul – Why should DISH be rewarded for willfully stealing TiVo’s patents? Remember that the jury found that they willfully used TiVo’s patents without licensing them. This wasn’t coincidental development or infringement due to ignorance. You are way off base blaming TiVo. Blame DISH for putting you, and all their DVR customers, into the situation. DISH can resolve it too – all they need to do is license the patents from TiVo as others have done. TiVo isn’t the bad guy if your DVR is turned off, DISH is. They sold you something they didn’t have the right to sell you. It is no better than a thief selling you stolen goods – would you blame the original owner for taking them back from you, or the thief?

    Anonymous – No, you’re confusing two things. The $19.95/month deal is from TiVo.com and if you go that route the TiVo is *free*, it is bundled. Actually a standard S2 is free, if you want the S2DT there is a $30 upgrade fee. The %19.95/month fee has a one year commitment, after that you can drop it to $12.95/month. $18.95/month carries a 2 year commitment, and $16.95/month three years – and both can be dropped to $12.95/month once the commitment is up. There are also pre-paid bundles where you can pay it all upfront and save more.

    If you buy a box at retail, then you get the $12.95/month rate. The trade-off is that you’re paying more upfront to get the box, instead of paying a little bit more ot get the box included.

  6. Paul L. McCord Jr. says:

    Megazone,
    I don’t see it as stealing. This is no different than using a VCR. Set the timer and watch it later. I have disagreed with patents from the beginning. I believe that consumers will choose which is the better product. If you could just keep the courts out of our daily lives, we would be so much better off. This idea that courts are objective and neutral is a myth. Have you ever been to a trial? Emotions trump facts every day. Play some sad music and people cave. I guess we come from different worlds because I don’t believe in intellectual property. Let the consumers choose. Competition is good. Lawyers bad.

    Just my opinion.

  7. Anonymous says:

    Paul – I agree with you, I experienced and incident with some intellectual property nuts just last night. I had gone to the cinema, planning to see the new X-Men 3 film. Long lines for tickets, and only late shows were available. Unfortunately, I’m apt to fall asleep in a dark theaters at that time of night, so brought my Sony camcorder with to record the film, enabling me to view it at a time when I can stay awake. You wouldn’t believe the comments and threats I received from the staff of the theater! I explained to them how I had fully paid for my right to the film, and that my recording of the film is simply my way of exerting my right to fair use and insuring that I will see the entire film should I fall asleep in the theater. They refused to run off a copy of the film for me, and also refused to allow me to record the film with my camcorder. On and on about intellectual property and copyrights. All nonsense.

  8. Anonymous says:

    I guessing you have a tivo unit. They are slow and have no HDTV abilities. your opinion is onesided.
    Dish will win this there is no way they will shut down millions of boxes. Even if it comes to them buying out Tivo.
    As for Tivo earnings from wht I heard they are struggling because they have so much competition and this is a last ditch effort to survive.