TiVo, the leading maker of personal video recorders (PVR), said Thursday it would double its current growth rate and hit a million subscribers next year. The company also said its early efforts at luring advertisers were bearing fruit.
Reporting its third-quarter results, San Jose, Calif.-based TiVo said it added 46,000 subscribers in the quarter to reach 510,000. Compared to last year’s third quarter, this represents 82 percent growth. Since the fourth quarter includes the holiday shopping season, TiVo expects to add another 120,000 to 130,000 subscribers.
“We continue to see strong momentum,” said Mike Ramsay, chairman and chief executive of TiVo. “This puts us in a strong position for the holiday season and the year ahead.”
TiVo has set aggressive growth targets for 2003, planning to double its growth rate and add between 450,000 and 600,000 new customers. In presenting these estimations, the company cited the increased awareness and popularity of PVR players, a churn rate under one percent, and new distribution partnerships like the one it signed with Toshiba earlier this month.
According to researcher Screen Digest, 14 percent of U.S. households will have a PVR by 2006, growing from the current crop of one million to 15 million. With TiVo crossing the half-million threshold, Ramsay said advertisers were beginning to recognize the value of the TiVo Showcase, a section showing branded entertainment from advertisers.
“Almost every week we have a new promotion on TiVo,” Ramsay said. “That whole area has literally exploded in the last six to 12 months for us.”
Despite the unease of some television networks and producers, advertisers have been drawn to TiVo by the interactivity it offers and the chance to glean visitor data.
Some advertisers have dipped their toes in the TiVo waters and reported success.
Newline used TiVo to promote “Austin Powers in Goldmember,” showing a film trailer and message from the movie’s star, Mike Meyers. Ramsay said two-thirds of the service’s subscribers viewed the trailer, staying an average of six or seven minutes.
Best Buy has also ramped up its TiVo promotions, completing last week a two-week James Bond showcase to spur consumer interest in a new 007 collector’s edition DVD. The Bond campaign was the company’s second, following its inaugural “Go Mobile” promotion of a Sheryl Crow album that the company said drew a 63 percent impression rate, with viewers spending an average of three-and-a-half minutes with the brand.
“People are willing to go there, and they spend a lot of time in those showcases,” Ramsay said.
For the quarter, TiVo reported a net loss of $11.5 million on $25 million of revenues. With the narrowed net loss and $40.6 million in cash, Ramsay expressed confidence that TiVo could ride out the current economic climate to capitalize on its early-mover advantage in the PVR market.
“This is shaping up to be a real watershed year for TiVo,” he said.
