TiVo Subscriber Base Grows

Digital video recorder company TiVo said it continued to add customers at a brisk clip in its fourth quarter, putting it on pace to break 1 million this year. As its subscriber base grows, the company said advertisers have shown more interest in its promotions options.

The company announced it added 115,000 new subscribers in its fourth quarter, reaching 624,000. Despite falling slightly short of the 120,000 to 130,000 additions it forecast for the quarter, TiVo said it was on pace to easily pass the 1 million mark later this year by adding 450,000 to 650,000 new subscribers this fiscal year. (The company’s fiscal year runs from February to January.)

The 64 percent growth rate in the year gives hope to TiVo, which allows users to record up to 80 hours of television programming, in its nascent efforts to convince advertisers that its audience cannot be ignored.

While TiVo was once seen as a mortal threat to advertisers, some big-name companies have tested out TiVo Showcase, an area of the service devoted to providing branded entertainment and allowing advertisers a level of interactivity with consumers.

“We’ve been adding promotions almost weekly to the TiVo Showcase area,” said Mike Ramsay, Tivo’s chief executive. “As we near the 1 million subscriber mark, this promotions business starts to reach critical mass.”

San Jose-based TiVo has had most of its success with entertainment companies, striking deals to promote New Line Cinema’s Austin Powers in Goldmember film and 20th Century Fox to promote five movies this year. Earlier this week, TiVo signed a deal to give previews and sneak-peeks of four PBS series this year. In addition, consumer electronics store Best Buy has used TiVo to hawk a Sheryl Crow album and a James Bond DVD set.

TiVo expects to add between 55,000 and 65,000 new subscribers in the next quarter, which is traditionally the company’s slowest. The company hopes it can drive subscriber growth at a faster clip the rest of the year, building on partnerships sewn up in January with Samsung, Toshiba and Philips to integrate TiVo technology in their products. Samsung and Philips plan to integrate TiVo with their DIRECTV receivers later this year. TiVo already had deals with Sondy and Hughes to use its digital-recording platform.

Researcher Screen Digest predicts 15 million U.S. households with have digital-recording capability in 2006.

For the fourth quarter, TiVo reported service and technology revenue was $13.7 million, more than double that of the year earlier. Net loss was $14.7 million, down from $41.6 million a year earlier.

Ramsay said advertising and promotions would contribute “several million dollars” of revenue in the next fiscal year.

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