TiVo Cuts Service Fees To Goose Holiday Sales

Dave Zatz —  November 12, 2012

tivo-sale2

‘Tis the season… for great gadget discounts. And TiVo intends to goose holiday sales by providing three months of free service to new TiVo Premiere DVR customers. This works out to a savings of $45 for new customers, or $39 if adding an additional unit to your account. However, should you choose to partake, it does require a one year commitment. Assuming TiVo has new DVR hardware in development and you wouldn’t hang on long enough for Lifetime service to be beneficial, by going with the base Premiere this works out to roughly $22/month over a one year period — about the same as what your cable company will charge for an inferior set-top box. Then again, it’s generally no muss, no fuss. Compared to the sometimes flakey CableCARD and SDV integration you might find on your hands with TiVo.

In other service plan news, rumor has it TiVo is contemplating renaming “Lifetime” — presumably due to a subset of customers that have found themselves surprised and disappointed that it can’t (generally) be transferred to new units, rather than TiVo rebranding to more easily pull the plug after a given number of years… as they did in the UK. TiVo retail subscriber numbers continue to drop, having peaked in 2008. So given their large cash warchest and licensing successes, perhaps it’s time to revisit lower service fees and the Xbox Live model (as I’ve suggested a number of times over the years). Rebuild the base and bank on the halo effect while expanding those analytics initiatives and hitting us with more ads to recoup the cost. So, like Microsoft, how about $60/year for TiVo service with an alternate option of something like $7.99 month (which Hulu, Netflix, and Amazon have settled on as palatable fees).

23 responses to TiVo Cuts Service Fees To Goose Holiday Sales

  1. After reading articles like this I’m reminded just how happy I am with my quad tuner Ceton card and Windows media center. No more monthly fees, easily and cheaply add storage, use extenders in other rooms removing even more monthly fees while enjoying a whole home DVR, never waiting on TiVo to integrate some web service into the user interface, etc…

  2. Renaming the lifetime service (actually “Product Lifetime”; referring to it as just “Lifetime” perpetuates the misinterpretation) is kind of silly. The alternatives that I’ve seen proposed aren’t any better and are even more confusing or ambiguous. The only possible improvement I could see them making is calling it “Device Lifetime” to emphasize that it’s tied to an individual device and not a product line.

  3. So wait, they’re selling a $50 320GB premiere with 3 months free subscription and $15/month after that with a 1 year committment?

    That actually isn’t bad.

  4. If they lowered the monthly service fee for the life of the device, I’d actually buy a Premier to get the faster transfers to replace the TiVo HD in my bedroom. But a one time savings isn’t interesting to me.

    Agree with you Dave. I was happy with $99/year honestly. The current fees per month are just too high, especially for those of use with multiple units. Its part of the reason we’re interested in seeing the IP box come out, since we’re all assuming (perhaps incorrectly) that it won’t come with monthly service fees…

  5. 3 months free isn’t “cutting the price of the service”. $5/month or whatever would be.

    Not a deal for those who are getting lifetime anyway. A l

  6. Rodalpho, didn’t realize original, smaller capacity TiVo Premiere units were still floating around out there… and at reduced prices. Hm. The promotion above applies to three specific SKUs — the newer TiVo Premiere (500GB), TiVo Premiere 4, and TiVo Premiere XL4 – with the TiVo Premiere 320GB and TiVo Premiere XL left out. Incidentally, the XL was next to the promo sign at Best Buy with “clearance” pricing of $200. But the promo code may work online anyway and, if not, I’m sure there’s at least one CSR who’d apply it if called.

  7. Ahh. It’s a much worse deal at $130 for the device, but still not bad.

    This is the first TiVo promotion in years that’s even moderately attractive. Of course my S3 still works, and rumors are we’ll get a series5 in 2013, so I’m in no rush.

  8. @Dave

    I think Tivo would benefit if you were a bit more critical of them. The ‘deal’ is no deal at all… And as you often do, you do not calculate in the cost of a cable card rental which starts at $3 min.

    So Tivo $150 + ‘serivce’ $135 + card $36 = $27/a month
    The average price for DVR is no more then $17

    Now i have a Tivo S3 and i do like it better but its ‘superior’ days are long gone.

    i still remember when they gave us that line about how our service fee was going toward constant software improvements which are no existent unless your constantly buying a new box which defeats the purpose
    no fee on my iPad but the improve it year after year

    Long time ago i think they had engineers running the company, ever since they left, the innovation has grinded to a HALT

  9. Mark, most folks think I’m too hard on them as it turns out. And I didn’t say this is a good deal, I merely said it’s a savings of $45. If you’re in the market for a TiVo, and choosing to abstain from Lifetime, may as well save a few bucks in the process.

    Regarding pricing, first off Amazon has the Premiere for ~$130 at the moment which is what I linked and based my napkin calculation on. As far as the cablecos go, it’s all over the map. I had three Comcast CableCARDs and never paid a cent to “rent” any of them. Their current pricing is the first card is free, additional cards are $1.50. On Verizon FiOS, I think I’m paying $3 or $4 now. FiOS charges $17-$20 for DVRs.

    So there’s probably a small price premium for TiVo over the incumbents in many scenarios, if not going Lifetime. But I’d say the bigger hurdle, for newbies, is conceptual and level of difficulty. Most people don’t know TiVo is an option as a cable box replacement. And, many that do, obviously don’t think it’s worthwhile (anymore). TiVo actually seems to be generating more money per subscriber these days, so the drop isn’t as painful for them as it could be and allows them to carry on at a leisurely pace. Not sure what their retail end game is, but they can’t produce economical hardware at this scale. Perhaps they’ll begin leveraging their partnerships with companies like Pace, allowing them to cut much of the hardware engineering and focus on the software platform they want to be. Of course, there’s no telling that any cost savings would work its way down to us.

  10. I don’t care what they call lifetime as long as they continue to offer it.

  11. I’ve only just gotten my first Tivo for OTA only and I’m on the $15 monthly plan…I just don’t see the value in going with lifetime. If they lowered it to $99 or even maybe $125, I’d jump on it.

  12. @Rob Spalding. Lifetime TiVos hold their resale value and you can usually recoup most if not all of your original lifetime payment when you resell to upgrade. People are still selling the TiVo HD with lifetime on ebay for $300+ and lifetime was $299 then. Essentially you only paid for the hardware at that point.

  13. I totally get that, it’s just that I can’t afford a $300 charge right now

  14. OK, so strike the remark about passing savings onto subscribers now that Tim Tebow is on the payrol. You may remember him as the terrible backup quarterback for the NY Jets and conservative activist. Both the new spokesman and CEO Tom Rogers agree with me that folks just don’t understand TiVo. Although trumpeting that sentiment in a press release is somewhat curious:

    http://pr.tivo.com/press-releases/tivo-introduces-tim-tebow-as-brand-ambassador-nasdaq-tivo-0954083?feed=All

  15. “OK, so strike the remark about passing savings onto subscribers now that Tim Tebow is on the payrol(l).”

    Perhaps TiVo could rename ‘Lifetime’ service to ‘Tim Tebow on an NFL roster’ service. It’d save them some money over time.

    —–

    For all the value represented in Lifetime service, I’ve always hated the idea. It’s always given me the idea that TiVo didn’t trust in their future, and seemed somehow ‘skeevy’ to me. In fact, it kept from going over to TiVo for a year or two because it made me have less trust in a company I didn’t really know.

    They ought to can Lifetime and very slightly bring down the monthly/yearly fee.

  16. The problem is I think they would lose even more customers if they got rid of lifetime. I know I would just hold onto my current boxes.

  17. The Tivo should be advertised with a price for “Service Included” and “Service Not Included”. Then advertise the service plans for Tivos with “Service Not Included”.

  18. Maybe Tivo could let MSO(s) have the STB hardware and fees, then allow retail customers to purchase a Tivo branded device similar to the Ceton InfiniTV 4 PCIe without additional fees. The biggest hurdles would be Tivo licensing out their OS via CD/DVD install, MSRP, and a bt remote solution.

  19. Lots of comments about the purpose of the “monthly service fee”. As a reference example the Tivo XL4 has 4 tuners, 2TB disk, nice quiet case, software support – all for $900.00 (w/ lifetime)… Not a bad deal when compared to a dedicated windows media computer.

    Cable companies offer theirs for 15-20/month, the FIOS boxes (16.99) are getting better but still not what I would prefer watching TV with. $720-$960 for 4 years (Lifetime equiv)

    TIVO monthly price – 720.00 for 4 years plus price of device.

    Of course we all have to add 3.00 for cable cards with the TIVO option.

    All of these options look very similar to me leaving the choice made on what experience you want from the device you watch TV on.

  20. Is this offer only good on TIVOs bought at Bestbuy? I can find no other mention of it anywhere else. Thanks.

  21. I realize everyone doesn’t have the option, but I can get a Premiere from my cable company (RCN) for $19.99 a month, service included, CableCard included. A four-tuner box is $24.95, and a bundle of a 4-tuner and a Replay is $29.95.

    You’d think TiVo would value a direct relationship with its customers enough to at least achieve pricing parity, but apparently not.

  22. The problem with Lifetime is that it’s a gamble. If you do the calculations (like Augeas has) and it lasts you 4 years, then it’s great. But if you buy Lifetime and the unit breaks tomorrow, you’re hosed. With the Cable Company, you get a new box for free.

    In addition, since there are basically no more software updates for non-current hardware (only updates tied to new hardware), a 3- or 4-year-old machine looks a lot less attractive than it used to.

    I have Lifetime on my S2, but declined it for my HD for the above reasons.