TiVo Segmentation Analytics

Presented by
23PGIB065 Akash B Thomas
23PGIB083 Manav Agarwal
23PGIB088 Parshav Garg
23PGIB090 Prasang Jain
23PGIB101 Shivangi Malik
23PGIB106 Siddhartha Sharma
 Introduction

Recently graduated from business school, John McCambridge is a newly

hired analyst at ThinkAlike. He is tasked with delving into TiVo Segmentation
Analytics to enhance the understanding of user behavior.

Objective: TiVo, a groundbreaking DVR technology, is at a crucial

juncture. McCambridge's focus is on leveraging segmentation analytics to
gain insights into user preferences, behavior, and market segments.
 Television viewing landscape Origin

TiVo was founded by Jim Barton and Mike Ramsay

In 1999, 98 Average household in August 1997 with the goal of increasing
million US had 2.4 TVs, spending consumers' control over their television viewing
households 7 hours 15 minutes
owned at least hours watching, but
one TV. interruptions were TiVo introduced a revolutionary PVR(Programs
common. Video Recorder)/DVR with features such as pause,
slow motion, instant replay, commercial skipping,
and advanced search capabilities.

VCRs were used, Users could opt for a monthly subscription ($9.95)
but or a lifetime subscription ($199), creating a
unique revenue model.
programming
was a challenge.
Business Model and Funding
Revenue Sources: Initially reliant on subscription
fees, TiVo anticipated significant revenue from detailed
viewer data. This data could be monetized by selling
targeted access to advertisers and programmers.
Strategic Partnerships: Collaborating with Sony and
Philips for hardware production, TiVo strategically
subsidized costs to keep lower-end models under $500.
Financial Backing: Attracting substantial financial
backing from venture capitalists and a notable
investment of over $240 million from AOL/Time Warner.
How TiVo Works
Technology Overview: TiVo's technology
involved converting analog video to digital, encoding,
and compressing it before storing on a hard drive.
Subscription Updates: TiVo used a telephone landline
to download daily updates and software
enhancements. This process was designed not to
disrupt incoming or outgoing calls.
Product Models: TiVo offered two models - a 20-
hour version priced at $299 and a 60-hour version
priced at $699.

Unique Pause, slow motion,

instant replay,
simultaneous playback
Option to skip
Search for and
record shows based
on favorite actor,
Recommendations
based on viewer

features:
commercials preferences
and record for live director, genre or
television programs show
 Assignment Questions

Q1. Create a table for each attribute (e.g., education) and record the percentage of responses for each
answer

Q2.
A) How many married men who are early adopters have monthly electronics spend high enough that they can
afford to purchase a TiVo for $499 and still be able to spend more on electronics in the next two years?
b) How many women with an education level of MA or PhD are making purchasing decisions for electronics
without discussing them with a spouse, either because they are single or because they are making purchase
decisions without the involvement of their spouses?
c) How many early adopters purchase electronics at least once every year, and do so in stores that specialize in
electronics?
d) How many seniors spend more than six hours a day watching TV? What is their income range? What is their
average annual income?
 Assignment Questions

Q3. Correlate Annual Income with Age and record the answer

Q4. What is the correlation between Gender and Annual Income? Explain why it makes no difference which
numbers are used to code Gender or other non-numeric attributes.

Q5. Correlation between:

a. Age and Purchasing Frequency
b. Annual Income and TV Viewing
c. Education and Favorite Feature
d. Monthly Electronics Spend and Monthly Household Spend
 Assignment Questions

Q6. Select one or more attributes to use as the basis for generating two segmentation schemes. For example, you
could choose Age as the basis for creating segments based on age ranges. Or you could select two attributes that
would help you segment by willingness to buy versus ability to pay.
As you generate segmentation schemes, Use the data in the "Survey Data" worksheet to fill each cell in the tables
shown below. Remember to try to create segments that are homogenous internally and heterogeneous across
segments for the indicated number of segments. Not all attributes will be used.

Segment 1 Segment 2 Segment 3 Segment 4 Segment 5 Segment 6 Segment 7

Market size (% of TV-involved
12.50% 17.90% 14.70% 16.70% 16.70% 14.20% 7.30%
households)
Average annual income 32,360 35,642 39,741 39,257 39,422 38,232 40,301
Description of segment Ages 18-25 Ages 26-35 Ages 36-45 Ages 46-55 Ages 56-65 Ages 66-75 Ages 76+
saving/time
Most appealing feature/benefit interactive features interactive feautres schedule control cool/schedule schedule time shifting
shifting
Stores shopped for electronics Retail/discount Retail/discount discount retail Retail/discount Discount Retail/discount

Average electronics purchase ($) 33.43 29.6 32.92 30.34 31.24 28.61 31.49
 Assignment Questions
Segment name Segment 1 Segment 2 Segment 3 Segment 4
Market size (% of TV-involved households) 29.00% 24.00% 32.40% 14.60%
Average annual income 34,259 39,900 38,707 39,192
Description of segment Millenials (18-34) Gen X (35-50) Baby Boomers (51-69) Silent Gen (70+)
Most appealing feature/benefit interactive features schedule/time shifting schedule saving/time shifting
Stores shopped for electronics Retail/discount Retail/discount Retail/discount Retail/discount
Average electronics purchase ($) 31.5 32.31 30.12 29.54

Q7. Write a 150-word summary of your selected segmentation scheme (from question 6) and how you arrived at the
segmentation. Include descriptive names for your segments that would be understandable to the marketing manager at TiVo.
I chose to select segmentation scheme B with the four segments. In this scheme, I was able to separate the segments by generations. For this sample size, each
segment had a pretty even distribution. I felt for a product like this, this was the best route to go because people within generations have the same thought process
when making a purchase. We can clearly see this in the fact that only Millennials chose the option of interactive features as a favorite feature while older
generations preferred saving shows to watch as a family. Also, annual income is more similar within generations. As the generations get older, they typically earn
more money. Using this attribute within each segment would make it easier for marketers to develop a plan that would appeal to each segment. For example,
Baby Boomers may be more comfortable spending the $499 for Tivo because of their income level while Millennials may be more drawn to deals that involve Tivo
at a discount. Using these segments makes it easier to see how much money each group makes. What is interesting is that this scheme shows that across the
segments, each one prefers to shop at either a retail store or discount store. So while older generations may make more money, they are still shopping at the same
stores as younger generations. Using this scheme, marketers will see this information and know that these are the two locations they have to concentrate on for
their marketing plan.