TiVo in 2002: Consumer

Behavior
Abha Bhuskute
Vijaya Suryavanshi
Kaniz Aeliya
Sahil Agarwal

10P133
10P179
10P205
10P228

Group 8

Case background
TiVo, Inc. was incorporated in 1997 - Creator and pioneer of the
also known as PVR

DVR

TiVos appeal - Innovation in features and product

Early on, TiVo had some success among young single men, and
enjoys the same success with higher income families

now

TiVo partnered with the satellite service provider, DirecTV, and

exclusive retailer Best Buy, a nationwide electronic store
Slow growth in subscriber addition (380,000 in March, 2002) as
compared to initial forecasts
TiVo has been losing money for the past 3 years
Huge cost of sales and marketing have little to show for it
Consumer Behaviour

Issue
Precarious financial position
Number of subscribers to TiVo is substantially
lower than previously forecasted
Subscriber profiles are narrow, indicating a
small target market
Promotion of the TiVo category, including PVR
and DVR, relatively low
Consumer Behaviour

Narrow consumer profiles

Saturation of TiVo within specific consumer segments - family
households and single men with higher annual incomes, and welleducated
Singles (female), low and middle income households (<50K), the
young (<25 yrs) and the elderly consumer (>54 yrs) remain a
small percentage of TiVo subscribers
7% are single women
Only 3% are between 18 and 25 years old
People with annual incomes below $50K are less than 25% of the
subscriber base

Consumer Behaviour

High customer satisfaction, but poor

growth
90% of customers are satisfied
> 95% would recommend the product
> 80% enjoy TV more after purchasing TiVo

Satisfaction level over 90% proving the products quality and

usability, but subscriber growth has been below expectations

Consumer Behaviour

Consumer Behaviour
Positioning based on consumer behavior within a certain
segment only, so marketing efforts end up being focused on an
already existing and well-penetrated segment
No recent research conducted in other niches such as lowincome households or people under 25 years old
Big influence of friends & family in purchase decision
Qualities are not tasted until it is personally experienced
Good post purchase Behavior survey suggests that existing
customer will most likely recommend it to others
Fascinated by TiVo , trying to apply same functions in nonTiVo situations
Consumer Behaviour

Breaking Through the Inertia

Consumer Behaviour

Breaking Through the Inertia

TiVo customers are fiercely loyal to their TiVo, and can
greatly influence future purchases among family members
and friends
Leverage this high customer satisfaction and influence by
offering referral discounts in the form of discounts off of
monthly subscription rates
Quickest way to improve financials is to increase
sales/subscriptions
Reposition TiVo in terms of pricing and product offering to
make it more acceptable to different customer segments
Consumer Behaviour

Recommendations

Customers like to maximize benefits from resources they

spend

Provide free subscription for 3 months to tie the

customers to their products

Provide Referral benefits to its existing customers.

Existing customers referring new customers will get
referral money

Repositioning TiVos Value Proposition

Upfront Discount in prices
Indirect reduction in prices by reducing ownership costs
Special time-bound discounts for lean periods
Discounted Gift packs (subscription pre-paid) for
Christmas/New years etc
Consumer Behaviour

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Recommendations
Make use of Super bowl experiment findings to convince
advertisers and network operators how TiVo can be beneficial
to them as well
Improve distribution system, use more cable providers and
retailers
Provide retailer support in the way of retail demonstrations
and sales person training

Consumer Behaviour

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Thank you!