Technology News Article | Reuters.com Reuters is reporting this morning that TiVo is “close” to offering a subscription only TiVo offering.
“Chief Executive Tom Rogers said the company, whose name has become synonymous with the ability to pause live television and skip commercials, was close to offering a range of pricing options, including one plan that would include a free set-top box.”
“The company is likely to begin the test to offer free boxes, possibly in exchange for higher priced and longer term plans, fairly soon, said Rogers, who was named chief executive last July.”
We reported here back on February 17th based on an interview Rogers had given to Bloomberg news that this was in the works. In that interview Rogers had said that they would look at a subscription only plan “early this year.”
I would suspect that initially they would limit this to Series 2 TiVo boxes which will be less desirable when the multi tuner HDTV standalone Series 3 TiVos come out later this year. Although no timing is set on when the Series 3 box will be released I would think that with the early adopter high-end crowd that beating Microsoft and their CableCARD equipped Media Center PCs to market would be a goal of the company at the moment. The Series 3 is currently believed to be in outside beta testing at the moment.
One strategy might be that TiVo would launch the subscription only Series 2 boxes at the same time that they released the higher end Series 3 box for purchase.
Although a higher monthly fee free TiVo box might not in fact be the best deal for a consumer when analyzing true total cost of ownership over time, it would nevertheless open the product to a much broader mass market audience and would compete with similar free unit subscription based offerings from TiVo’s satellite and cable competitors.
No word on what they would price a subscription only box at. According to Reuters most consumers pay about $13 a month for their TiVos today.
With a subscription only version launch, it would seem important for TiVo to effectively distinguish their product from the cheapo freebie cable and satellite offerings to justify what would surely be a more expensive monthly cost.
I would assume that a subscription only pricing option on a TiVo would be similar to your contract with the cell phone company with a service agreement time period (one year? two years?). One thought for TiVo would be that if they launch this pricing plan with their Series 2 units that they have a provision in their contract to let anyone out of a service agreement if they ugrade to a Series 3 TiVo when they are available later this year.
*Davis Freeberg Update – Dave Zatz found an interesting videotaped interview of Tom Rogers at the Reuters event earlier today. The interview lasts about 5 minutes and is definetely worth checking out.