TiVo Wins Subscribers at Cost to Bottom Line

14 March 2005

TiVo has announced losses continued into the fourth-quarter primarily due to high rebate incentives aimed at recruiting subscribers.

The manufacturer of digital video recorders posted a loss of $34 million (€25.34m; £17.71m), equating to 42 cents a share, on sales of $60 million for its fourth-quarter ended January 31.

TiVo executives attributed the losses to an aggressive discount campaign and increased ad expenditure. The rebate programme almost halved the cost of entry-level digital video recorders to under $100. Meantime, marketing and advertising outlay doubled in Q4 to $11.5 million, as compared to $4.7 million the previous year.

The Alviso, California-based company remained buoyant however, pointing out that the number of subscribers had doubled to over 3 million, revenue was on the up and there would be forthcoming cuts in acquisition spending - which it expects will put the company in the black by this fiscal year's fourth-quarter.

Data sourced from Washington Post Online; additional information by WARC staff