Tara Maitra, TiVo’s senior vice president and general manager for content and media sales, talked to Consumer Electronics Daily (CED) about advertising during the recent Digital Hollywood event in NYC. She said that TiVo needs to approach 10 million subscribers before advertising becomes a “meaningful” business for TiVo. By way of comparison, as of December 31st TiVo had 2.2 million subscribers, an increase of 200,000 from the previous year. These subscribers don’t have to be ‘TiVo owned’, as TiVo handles advertising sales for several MSOs who use their platform, such as Charter Communications, RCN, Suddenlink, and Grande Communications. And as their deal with Comcast involves support of retail units, those subscribers will be TiVo-owned, and so TiVo will naturally be handling advertising on those units.
Note that TiVo’s major MSO partners in Europe, Virgin Media and ONO, handle their own advertising sales and thus will not count toward that ten million subscriber target. Nor does it include the “TiVo Design” Insignia Connected TV’s sold by Best Buy, at least not at this time. Maitra did point out, however, that TiVo’s recent deal to bring their platform to Pace hardware does include an advertising component. So that deal may open up new MSO markets for TiVo.
In the meantime TiVo does still sell advertising, of course. It seems it must be somewhat successful for customers as Maitra stated that over 50% of TiVo’s ad buyers are repeat customers. TiVo users are probably familiar with these ads. They may be seen on the screen that pops up at the end of a recording, at the bottom of a program group in the Now Playing List, or on the main ‘TiVo Central’ menu screen. TiVo also has had other ad options, such as static ‘billboard’ ads that overlay a commercial for the same product if the commercial is being fast forwarded. TiVo seems to have a working formula for advertisers, now they just need to bring the numbers up to create a more attractive market.
“We used to hear all kinds of things from advertisers and agencies about pricing,” Maitra said. “I feel that we have gotten it all right except that they just want more homes. Now we have at least satisfied the trajectory and growth requirements. We have priced the advertising for the number of homes that TiVo is in and it’s working, but none wanted to invest in something that they didn’t have confidence would be a growth platform.”
CED also spoke with Thomas McMillin, Chief Operating Office for Suddenlink, one of the MSOs currently distributing TiVo DVRs directly to their customers. McMillin had some good news, and some bad news. First, the good news; Suddenlink serves 1.37 million homes and TiVo is available to customers in 70% of their markets, and it should be in 90% of their markets by year end. But he bad news is they currently have only 20,000 TiVo units deployed, in 10,000 homes. Yes, clearly some homes have multiple units.
Suddenlink is taking a “conversative” approach to marketing TiVo to their customers, positioning it as a premium upgrade from their standard HD DVR. Suddenlink charges a $15 monthly fee for TiVo and requires that customers have broadband with a minimum speed of 10Mbps. All told they have HD DVRs, TiVo included, in 47.7% of their customers’ homes. Doing some back-of-the-envelope math that means 653,490 homes with HD DVRs, 643,490 of which are not TiVo households.
The main reason for the soft sell on TiVo seems to be their existing stock of non-TiVo HD DVRs. They don’t want to be “stuck with” them if they were to more aggressively push TiVo. That does leave a ray of sunshine though. Hardware has a finite usable life, and that stock of non-TiVo HD DVRs will eventually be exhausted and begin to wear out and need replacing. If TiVo can position themselves as that replacement they’d have a slow but steady market by attrition.
Mirrored from Gizmo Lovers Blog.