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Technology Stocks : Tivo (TIVO) Interactive TV -- Ignore unavailable to you. Want to Upgrade?

To: Andre Williamson who wrote (1709)	6/27/2005 4:34:04 PM
From: Wyätt Gwyön	Read Replies (2) \| Respond to of 2093

do you suppose Tivo's customer acquisition costs are zero? support services zero? ongoing operation costs and retention costs zero? these are not the case. i think Tivo breaks out the operating costs in their filings. for the $300 Tivo has an equipment lifetime obligation to service the customer. this has a cost, along with the cost of the equipment. i am rather confident that Tivo paid considerably higher than zero for the equipment as well. by giving away the equipment Tivo must use the entire $300 to cover both the actual equipment subsidy as well as the entire lifetime of service costs, and then show a profit on top of that. not to mention, they are leading customers to expect cheaper prices in the future by giving units away. but, leave it to the bulls to argue that giving away equipment for free is actually a sign of strength -g-.