TiVo continued to struggle over the holidays, watching its subscriber additions dip despite an intensive marketing effort.
DVR pioneer made progress in cutting its net loss, however, and said developments coming in the second half of the year, including a distribution deal with Comcast and a long-promised high definition recorder, would revive its fortunes.
In the short-run, however, company is focused on adding new subs, particularly those with analog cable who don’t have access to a DVR from their cable provider. In a renewed bid to appeal to them, TiVo is changing its pricing strategy.
New options include free hardware in return for a one-to-three year commitment at higher monthly subscription prices. Buyers will also have the option to pre-pay up to three years of service at a reduced rate in order to avoid a monthly bill. TiVo is eliminating its lifetime subscription offering, a fixed-fee plan that gives the company an up-front boost but ultimately leaves it with customers who don’t contribute ongoing revenue.
Pricing plans will be available on TiVo’s Web site starting next week, and will be rolled out later this year.
TiVo added only 183,000 net subscribers on its own, a 27% decline from the same quarter last year. As expected, net sub adds from its DirecTV partnership fell sharply, down 61% to 173,000. DirecTV has focused marketing on its own generic DVR from a News Corp. sister company before the two companies’ deal expires next year.
For the quarter ending Jan. 31, revenue was up just 1% to $60 million as hardware sales fell sharply, but service revenue from subscribers grew as the total number of subs keep climbing.
Net loss declined 42% compared with a year ago to $19.5 million.
For the fiscal year, net revenue rose 12% to $195.9 million and net loss declined 57% to $37.4 million.
On a conference call with analysts, CEO Tom Rogers said the Comcast deal, through which TiVo will sell DVR software upgrades and advertising inserted into recorded programs, will launch in the second half of the year. Company is in talks with other cable providers about similar deals.
Shares in TiVo fell 2% to $5.75 Wednesday.