Say goodbye to lifetime subscriptions...
(TIVO)
5.86 +0.11: The pioneer of the digital video recorder narrowed its net loss in the fourth quarter as subscriptions soared 45% after the company cut prices. The Alviso, California-based company reported a net loss of $19.5 mln, or 23 cents per share - a penny ahead of the consensus estimate. Strategic changes involving pricing, distribution, and service offering are taking hold and boosting subscriber growth. Management anticipates revenues in the first quarter to be in a range of $48-$50 mln versus a consensus estimate of $47.7 mln. The forecast at the high end equates to a sequential rise of possibly 5% from the fourth quarter, which grew 37.5% year/year to $47 mln.
CEO Thomas Rogers outlined initiatives to boost the company's subscriber base, which involve a new bundled service that will include hardware and subscription fees, along with adding Radio Shack (RSH) as a distribution partner. TiVo's biggest partner, DirecTv (DTV), will also begin selling its own DVR which is adding customers. The company unveiled a new service yesterday that allows customers to program DVRs from their Verizon handsets. This service comes after a consortium of cable companies, including Time Warner Cable, announced a joint venture with Sprint (S) integrating cable and wireless services on a single device.
TiVo added 4.36 mln subscriptions in the quarter with DTV accounting for 66%. Following aggressive pricing reductions by its competitors, TiVo cut prices in half to $49.99 for a box able to record 40 hours of programming. The company announced today it will end its lifetime memberships, which it had been selling for $299. Shares have been roughly flat over the last eight months after reaching a 52-week high in May. For those looking to cash in on rising DVR penetration, we would prefer the box manufacturers like Motorola (MOT), or the service providers like News Corp. (NWS/A), which owns 40% of DTV.
--Kimberly DuBord, Briefing.com Story Stocks |
