rodriguez tivo presentation
TRANSCRIPT
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Zino EgwehJohnny Ferraro
Brittany CulbersonThroy Campbell
Amanda RodriguezHeungsun Lim
TiVo in 2002
Consumer Behavior
MARK 5311
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TABLE OF CONTENTS
Introduction
What is TiVo
TiVo v. Competitors
Dilemma
Consumer Behavior Model Options
Recommendations
TiVo Today
Financials Q & A
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HOME ENTERTAINMENT BEFORE TIVO Satellite and cable channels present a dilemma for
consumers Too many favorite shows, conflicting times, busy lives
Gary Becker and discretionary time How can we maximize the enjoyment of discretionary
time?
VCR Record your shows
Problems Hard to program, not picture perfect clear, does not
allow you to record and play a tape at the same time
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INTRODUCTION Then came TiVo
TiVo was founded in 1997 by Mike Ramsey and JimBarton TiVo revolutionized the home entertainment industry
when it pioneered the DVR technology
PVR=DVR personal/digital video recorder September 30,1999: TiVo made its initial public offering
for $16 per share
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HOW DOES TIVO WORK TiVo captures TV from satellite, cable and air, turns
it into a digital form and stores it in a hard drive(Stephen Wildstrom, Business Week)
DVR allows consumers to record TV programs on ahard disk instead of video cassette (VCR)
TiVo consumers can watch their favorite showsduring leisure time
TiVo consumers can pause live TV, fast forwardthrough commercials, go back for instant replay and
watch programs at a convenient time
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COMPETITION COMPARISON
o TiVo
Has become a verb in households, i.e. I TiVoed that show last night Easier to use according to consumersearch.com WishList feature allows viewer to search for specific actors, directors,
or even sports teams and automatically records them for you Offers parental controls in the form of TiVo Kidzone by pre-screening
programs for age appropriate rating TiVo to-go allows a viewer to transfer recorded material to personal
laptops, other TiVo customers (mainly used for home video) and othermobile devices
TiVo online services allow the viewer to set up and maintain their TiVodigital recording device via internet access. (This feature is onlyavailable on the series 2 and higher, not available at time of casestudy.)
Requires separate TiVo box to be purchased along with monthlyservice fees TiVo season pass allows viewers to record every episode of their
favorite shows whenever they play. Can download rented or purchased movies from Amazon.com (current
market product)
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DVR COMPETITION Many cable, internet providers can provide DVR service without
additional monthly service fees, generally less than that of TiVo
Service can be rented if desired instead of purchased
Many programs do not come with contracts allowing unrestrictedentry and exit from the product
Most cable and satellite TV providers offer this service
Internet providers are offering similar products via the PCwhereby viewers can download straight to the PC hard drive andwatch video wherever they choose
Both TiVo and other DVR products Multiple tuners allow for multiple channel watching and recording
simultaneously
Both offer HD recording products (current market conditions)
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MARKETING STRATEGY Originally very little spent on advertisement
Once the product gained recognition, it would sell itself
Consumers would find a need for TiVo
Relied on customer evangelism
Believed satisfied consumers would persuade others
Expensive
Consumers unwilling to pay $200 for box in addition to monthlysubscription
High-tech VCR
Too much hassle
Families do not want another gadget
Hard to maintain
Spying
PERCEPTIONS OF TiVo
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TOO SMART FOR THEIR OWN GOOD
Pioneers often overthrown by competitors
Its not necessarily being first to market that counts. It's being first to
establish your brand in the minds of your target market that willensure success. But be warned, awareness is not the same asestablishing a brand. Julian Hearn, Brand Strategy Director, Kruder -November 6, 2001
Generic DVRs in abundance
DirecTV
Other cable companies offering DVR bundled with
cable box Loss of market share
Unable to turn a profit
Not enough customers to offset costs
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BEHAVIORAL MODEL In an attempt to better understand and satisfy consumers needs and
wants, TiVo conducted surveys which provided primary information.
Responses enable TiVo to analyze internal and external influences, whichimpact customers self concept and lifestyle.
The consumers way of life result in needs and wants, which begins thedecision making process. Acquisition of and experience with the personalvideo recorder (PVR) impacts persons lifestyle and ultimately furtherpurchases and product loyalty.
Information was gathered using a biannual consumer survey, attitudesurvey and logs provided through consumer usage of the PVR.
Satisfaction, Usability and Demographics
Viewing Habits, Life with TiVo, TiVo vs. Technological Gadgets, Fun Facts
Diagnostic data
Discussed by using Dr. Rogers Consumer Behavioral model
Consumer Biannual Survey:
Attitude Survey:
TiVo Logs:
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Internal(psychological)
External(sociological)
culture
social class
reference groups
family
marketing mix
needs
motives
wants
awareness perception attitude preference
b
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av
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learning
personality
BEHAVIORAL MODEL
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yDemographics
Tech Gadgets
Diagnostic Data
Diagnostic Data
Tech Gadgets
Viewing Habits
Fun FactsDemographics
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BEHAVIORAL MODEL External (Sociology)
Demographics 78% of subscribers were 2554 age group which comprise 60% of population
Families with young children are well represented
71% of subscribers are home owners; professionals with upper management occupations
Internal (Psychology)
TiVo vs. Technological Gadgets Compared to microwave (unavoidable component of everyones home)
Personality & Perception Viewing Habits
69% of subscribers watched more television with TiVo
Life with TiVo TiVo impacted viewers day to day personal life and interactions with others
Fun Facts 96% of users find it frustrating to watch television without TiVo
Behavior
Usability 89% perceived TiVos easy to use
95.1% found the Trick Play (pause, rewind, fast forward)
Satisfaction
90% of customers were satisfied with TiVo and 96.4% would recommend
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OPTIONS
Product Strategies
Sell technology Develop unit that contains TiVo software and cable/satellite
box in one Develop more features that appeal to public Develop a lower-end/more generic unit that is more
affordable to company and public
Develop software that more accurately tracks and analyzessubscriber data (demographics, programs watched,commercials watched/skipped, etc.) and sell to marketingcompanies
Protect valuable patents
Distribution Strategies Sell standalone units at more electronic and super stores License software with all cable/satellite television services
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MORE OPTIONS
Promotion Strategies Reevaluate advertising dollars and reallocate dollars to
television ads during most watched shows, major sportingevents and sweeps months
Cut advertising budget
Offer coupons/rebates on standalone unit purchase
Offer free product trial on lower-end units Offer incentives to subscribers who influence enrollment of
friends/family
Offer free set up and training to subscribers
Pricing Strategies Immediately cut price on standalone units
Eliminate initial purchase of standalone unit andincrease monthly subscription price for unit rental
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RECOMMENDATIONS
Develop a lower-end/more generic unit
Immediately cut price on standalone units Offer rental contract on standalone units
License software to cable/satellite televisionproviders
Begin aggressive promotion programs Refer-A-Friend and save!
70% of TiVo purchasers knew someone with TiVo prior topurchase
68% of TiVo purchasers were influenced in part by friends
Free trials, coupons and/or rebates Life is better with TiVo.
TiVo more important than everything but my children
Ranks more important than VCR, MP3 player, videocamcorder, digital camera, DVD player, PDA
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TRYING TO EXPAND MARKET Bolsters international presence with launch of TiVo service at retail in Canada
Develop a software solution that will bring the TiVo experience to users
receiving their television signals through a computer Broaden relationship with NCTA
ANNOUNCED RELATIONSHIP WITH NCTA Solidifying relationships with the cable industry, ensuring easier installation of
Cable CARD products and underscoring the cable industry's recognition ofTiVo's importance to their subscribers
Comcast, Wind stream Communications, Jaman.com, Music Choice Network
INTERACTIVE ADVERTISING &
AUDIENCE RESEARCH PARTNERSHIP Stop//Watch(TM) Rating Service to NBC & CBS
Power//Watch(TM) Consumer Panel to Starcom & Carat
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SUBSCRIBER NUMBERS
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
Oct31,2007
July31,2007
April30,2007
Jan31,2007
Oct31,2006
July31,2006 April
30,2006 Jan31,2006
MSOs/Broadcasters
TiVo owned
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CONTINUED POOR EARNINGS
As Reported Annual Income Statement 1/31/2007 1/31/2006 1/31/2005 1/31/2004 1/31/2003Service & technology revenues 217,985 170,859 115,476 77,357 60,170
Hardware revenues 88,740 72,093 111,275 72,882 45,620
Research & development expense 50,728 41,087 37,634 22,167 20,714
Sales & marketing expense 42,955 35,047 37,367 18,947 17,629
Net income (loss) -47,754 -34,398 -79,842 -32,018 -80,596
0
100,000
200,000
300,000
Service & technologyrevenues
Hardware revenues
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STAGNATED STOCK PRICE
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Q&A