Audio Video News

It's been a long, hard road for TiVo, the company that started the digital video recorder (DVR) revolution. Even though the name has become a household word (as both a noun and a verb), TiVo has struggled to stay afloat since it was founded in 1997. In fact, it has yet to show a profit.

That could be about to change. On March 10, 2005, the company reported that it added nearly 700,000 subscribers in the fourth quarter of 2004, more than double the number added in the same period of 2003. That brings the total subscriber base to more than 3 million, over twice what it was a year ago.

"This was yet another year of continued growth for TiVo, and we met our objective of doubling our total subscription base in the year," says Mike Ramsay, TiVo's chairman and CEO. "Now, with total subs over 3 million strong and growing, we are focused on reaching profitability. We have a growing base of recurring revenues that, combined with planned reductions in total acquisition spending in the year, will put us in a position to achieve this goal by Q4."

Following closely on the heels of this announcement came the news on March 15 that the company had reached an agreement to collaborate with Comcast Communications, the nation's largest cable operator, to develop a version of the TiVo service for Comcast customers. The service should be available to those customers in the majority of the company's US markets by late 2006.

This news couldn't have come at a better time for TiVo, which seems to be losing its relationship with DirecTV as evidenced by the announcement at CES last January that the satellite provider's next-generation set-top boxes will not include the TiVo service as previous generations have. DirecTV currently accounts for 62% of TiVo's customers. According to Bruce Leichtman of Leichtman Research Group, "It was a nice chess move for Comcast, and the loser is DirecTV. Murdoch [Rupert Murdoch, the head of News Corp., which owns DirecTV] could have taken the TiVo brand name as his. Now he has lost that." Time will tell if the Comcast deal can keep TiVo on the upswing, but for now, the future looks pretty bright for the company that started a TiVolution.