TiVo’s always had a bit of a marketing problem. Yet it’s not exactly clear if it’s because their value proposition is difficult to communicate (possibly) or their efforts are misguided (definitely) or a bit of both (likely). But it’s deliciously ironic that they’ve announced they’re dialing back their advertising spend … the very same month their research unit indicates a negative impact on brand awareness and sales. Skate to where the puck will never be?
https://www.youtube.com/watch?v=8oFi6ScP4E4
Cutting TV ad spending led to much lower sales for most of the marketers included in a new study. […] For every dollar cut from the TV budget, sales fell $3 dollars, the research found. Return on investment dropped as well. The average marketer reduced its ad budget by $3.1 million, resulting in lost sales of $8.6 million. […] In terms of other marketing goals, the companies that cut their ad spending reached fewer potential customers.
And then on the consumer side, we are going to be investing less in the Marketing of consumer.
Well, I get the sentiment, but that seemed unnecessarily vulgar.
They’ve never been able to translate the “you have to pay for this monthly” thing into a proposition consumer could understand. Especially when the other option is “pay a hefty one-time fee.”
That’s a value prop that makes a lot of sense with their hardcore fan base but not with new users.
Does TiVo make a 33% margin on each new user? If no, then cutting $1 of advertising to save $3 of sales is actually a net win.
“That’s a value prop that makes a lot of sense with their hardcore fan base but not with new users.”
I’d rephrase a bit. It’s a value prop that makes a lot of sense for most people, but ‘normal folks’ don’t grasp the concept.
Also, Dave, they did say they were going to reduce the focus on retail, no? So perhaps here is the most tangible manifestation of that…
they did say they were going to reduce the focus on retail, no? So perhaps here is the most tangible manifestation of that…
Yeah, this is really about TiVo moving away from retail. I’ll be surprised if we ever see a Bolt OTA see the light of day. And I’m beginning to wonder if we’ll see a retail successor to the Roamio Pro/Plus. Perhaps part of the reasoning behind the decision to give SkipMode and QuickMode to Roamios is that TiVo is unsure at this point whether they’ll even bother rolling out a high-end Series 6 unit. Maybe just continue selling through (and manufacturing more?) high-end Series 5 units while giving increased attention to their MSO and data businesses.
Too much logic here, just focus on the irony for a moment. ;)
Typical mistake many businesses do. They have some financial issues or decide they need to save money, so they cut advertising and things get worse. If it wasn’t for the comment about decreasing emphasis on the consumer side, I’d be pretty nervous about my $1000 in Tivo lifetime hardware. Is it possible Tivo has such an awesome next-gen system (cloud-based?) in line that they think they can make a major push back into MSO market?
I don’t see how they survive. In the short run the value proposition isn’t there. In the long run it all moves to web/cloud with a streaming box
I don’t understand why throwing in with MSOs as their primary business model precludes them from selling to retail. Couldn’t they make X amount more of the very same unit that they would develop and sell to the MSOs, and sell them privately to Retail subscribers that prefer to own their hardware (maybe doing so exclusively through their site, or via select third parties, but maybe dropping the brick and mortar shelf space)?
Unless their plan is to go software only, and drop the hardware side completely, but being that their software relies (at least presently) on 3rd parties to develop OTT apps, that doesn’t seem like a valid gamble… Roku (and to a lesser extent, Apple TV) is successful due to providing all of the apps in one box, but I don’t think they could get away with selling a software-only service.
OK, I get the joke of the ad. In fact, it is kind of funny once I think it through, but also agree with the earlier post about it being, at least a bit, vulgar. The ad isn’t really executed that well and I could not understand what the gal said the first time I viewed the ad. It took at least two more viewings for me to get it because she was screaming so loud, I could not understand what she was saying.
This is ad, however, is not for the TiVo loyalists and fanboys who are TiVo’s soldiers in the field, who are quick to support (or make excuses) for their favorite DVR: TiVo. Oh no, they are the converted and don’t really merit TiVo’s prime attention. This ad is for the young, potential new subscribers TiVo hopes, and, apparently, needs to continue the retail end of the business. The shock value (and loudness) of the ad is designed to get anyone’s attention, and the vulgarity is believed to be just the kind of humor the young consumer loves. Still, the ad won’t work in selling any more Bolts than otherwise would have. No matter how good the ad, it is the TiVo pricing that will have the young ones screaming even louder than the woman in the ad, and they will be leaving the store. Let’s just resign ourselves to accepting the Bolts failure and TiVo’s greatly reduced retail side. I all ask is that when the time comes, they keep my TiVo DVR’s and accessories operating as they do today. I would not expect them to incur costs for any of the OTT features of the devices. But we shall see in a year or so how it all turns out.
I forgot to add that I would really love to see TiVo put a DVR on the market, perhaps an OTA or base roamio, priced to directly compete with inferior, but highly popular Channel Master DVR+ as a one-time purchase price with no fee, ever. Perhaps TiVo could eliminate the OTT features to have such a TiVo make economic sense for TiVo and cord cutters. I really wonder how better TiVo would be doing in retail had they thought to enter such a device as a real alternative to the CMDVR+. Instead, the OTA seemed to me as an afterthought, and TiVo never seemed to be truly aggressive in competing with CM all those years CM kept getting those people to buy their, at first, crummy, and then later, pretty decent DVR’s. Perhaps it was a culture of thinking at TiVo that never allowed them to think of filling that CM has done so well for years.
Oh that ad was just one convenient and current example. I’m referring to years of bizarre and/or ineffective marketing. But, yes, recent advertising has been a bit on the raunchy side…
https://www.youtube.com/watch?v=mNSGUbx91Ao
https://twitter.com/davezatz/status/566579883745112065
As far as ineffective, this surely cost them tens of thousands of dollars (or more) and likely moved an insignificant amount of boxes:
http://www.adweek.com/news/advertising-branding/ad-day-watch-tivo-crash-movie-theater-and-interrupt-film-commercials-168708
But, hey, at least it’s cheaper than having Tim Tebow as a spokesperson:
https://zatznotfunny.com/2015-07/is-tebow-still-on-tivos-payroll/
And maybe that’s why they couldn’t afford a $500 press release announcing they’ve answered customer calls and expanded their app platform with HBO GO, WWE, and more on the way as the leader in unifying linear and OTT content.
@Tim
“Yeah, this is really about TiVo moving away from retail … And I’m beginning to wonder if we’ll see a retail successor to the Roamio Pro/Plus.”
My suspicion is that you’re being unduly alarmist. They can keep rolling out new hardware for their MSO partners, and continue to sell those units to retail customers while still deemphasizing retail. It could well just mean stuff like less advertising and marketing.
Given that they get larger margins from retail, (at least that’s my understanding), there is zero downside for them in repurposing hardware for the retail channel, as they’ve long been doing…
@Chucky: Yeah, you’re probably right. As long as TiVo knows that the Series 6 Pro hardware design can be easily rebadged for MSO partners (a la Roamio Pro to T6) and that they already have a deal in place for MSOs to purchase those units in the coming year, it makes no sense NOT to sell the Series 6 Pro on TiVo.com, use retail buyers as beta testers, and get some fat margins. Maybe the plan is “milk the base” but don’t bother wasting money on marketing because there’s no growth in the retail CableCard market.
Did anyone actually read the report as it’s about consumer packagedgoods?!
“results of a study that showed when 15 Consumer Packaged Goods (CPG) brands cut their TV advertising budgets, the majority lost a much greater amount in sales year-over-year. ”
“Consumer packaged goods (CPG) are consumable goods such as food and beverages, footwear and apparel, tobacco, and cleaning products. In general, CPGs are things that get used up and have to be replaced frequently, in contrast to items that people usually keep for a long time, such as cars, TiVo DVRs, and furniture.”
http://investor.tivo.com/mobile.view?c=106292&v=203&d=1&id=2146373
Ha, that’s awesome. You’d think maybe they’d have wanted to communicate that distinction in the press release, in general but especially on the heals of the quarterly call where marketing reductions were announced (and strongly contested by Richard Tullo)? But, to answer your question, no I (and most others I imagine) didn’t read the study — the topic wasn’t interesting enough for me to pursue further and it wasn’t actually linked from Broadcasting & Cable, where I came across the topic. But now the story is doubly ironic… emphasizing, once again, TiVo’s routinely ineffective and potentially detrimental outreach.