Thursday, March 09, 2006

TiVo Changes Pricing Structure...Bad Move

Hazzard from Everybody Loves Your Money beat me to the punch with his article asking if TiVo is Off Their Rocker. For those that have not heard yet, TiVo has changed their pricing structure and gotten rid of their lifetime subscription. I personally do not think that this was a good move for them and I think that they are on their way out.

I have been a huge TiVo supporter over the years. I have had a TiVo for almost 5 years now and can honestly say that it changed the way that I watch television. The thing is amazing, letting me pause live TV, get a season pass to shows that I watch, watch shows whenever I please, and fast forward through all the annoying commercials. The main benefit that TiVo has over others is their interface, the software is great. Back when I got my TiVo, I think that I paid almost $300 for the hardware and $250 for the lifetime service (rather than paying the $12-$13 a month). In general it has been worth every dime.

The problems that I have with TiVo thus far are few, but they are pretty big. They are big enough that it caused me to get a DVR box from my cable company as well. The main problems that I have is their lack of HD support and the fact that they only have one tuner. The cable companies have since launched their own DVR services that include both of these for about $10 a month. This is less than TiVo was charging on their old pricing plan and they are giving me more options. The problem with the cable DVRs is that their interface is atrocious...I actually cannot believe that the people that programmed it ever even tried to use it, that is how bad it is. It does, however, get the job done and it gets it done in most cases better than TiVo since it can record in HD and record 2 programs simultaneously (and I could be watching one that was already recorded at the same time). I realize that TiVo will be coming out with the Series 3 box sometime (no real date yet, should have been about 3 years ago though), but I think that it is too little too late. Why would anyone pay for TiVo when their cable box could do the same thing cheaper and let you have 1 less box next to the TV (the cable DVRs replace your existing cable box)?

Another problem that I have always had is with the way that the subscriptions work. When I got my TiVo and my lifetime subscription, I only got it for that particular box. If that box breaks after a year and I need to get a new one, I have to buy a new subscription. I do not like that model at all. The way that it should work is that I should buy my subscription and then I should be allowed to have 1 box for that price...if my first one breaks, I should be able to get a new one under the same subscription. Currently, if I want to give my box to my parents, I believe that they would have to get a new subscription. Also, if I wanted to get a second box for my house, the monthly fee is dropped to $7, but the lifetime fee does not drop by half, it stays at $250. That is why I have always only had 1 TiVo box. I do not think that it is worth getting a second box with their current subscription model.

Here is the new pricing model that they will be using:
  • $16.95/month or $469 prepaid with 3-year commitment
  • $18.95/month or $369 prepaid with 2-year commitment
  • $19.95/month or $224 prepaid with 1-year commitment
Are they nuts? The big sell (that they say anyway) is that the hardware is now free. Wow!!! So you saved me $20-$50 on upfront hardware costs that you will now recoup in half a year. Thanks. TiVo hardware has had some amazing deals on it lately making it very cheap to get, that should not have been a barrier to entry for anyone.

I just do not see this being a good thing for consumers and that means it will not be a good thing for TiVo. Nobody should even consider this deal if you can get a DVR from your cable or satellite provider for so much cheaper and generally with more options. As I mentioned, TiVo has the best DVR interface, hands down. What the company really needs to do is license that software to other providers to use. That will take care of my complaint about my cable DVR too. This way, TiVo makes money, the cable companies continue to make tons of money, and I think that the consumer wins in the end too.


Blogger freedumb said...

I never owned a TiVo, although I used it a lot at my friend's place. I like it...but my TimeWarner interface is not all that bad, HD, and 2 tuners...I like it. I can't mod it, but that's okay...Another thing you forgot to mention is that you have warranty on the box from the cable company that lasts pretty much forever...I hope TiVo can evolve into something that keeps growing...I like them as a company. I wrote something earlier on TiVo too.

3/09/2006 5:04 PM  
Anonymous Phil said...

Tivo is dead anyway, since Apple is about to make a vigorous move into that market. I wouldn't be suprised if Apple bought Tivo in the next year or so. The Mac Minis are becoming decreasingly computer-like and increasingly TV/stereo-like, so it's only a matter of time.

3/11/2006 2:43 AM  
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