I don’t own a TiVo. Besides dinking around with some at trade shows, I’ve never even used one. I hear they’re fantastic. The company’s announcement today of a temporary reinstatement of its “Lifetime Subscription” for $400 makes me wonder: why does TiVo charge a service fee at all?
I understand that it takes time and money to build (or license) program data, but it’s the sort of information that scales. Once the program guide is built it can be replicated for almost no cost, no matter how many more TiVo units are activated. Instead, the company charges hundreds of dollars over the lifetime of the device for the very data that makes their machines work. In their business model holding the reins of the data makes their product more valuable, but it actually makes their product less valuable to buyers.
Since the main competitor to TiVo is not other third-party DVR manufacturers but the set-top boxes licensed by cable companies for a monthly fee, it would seem like a smart way to differentiate their product. As it stands now, every time I consider buying a TiVo I have to ask myself if I want to pay several hundred dollars up front as well as several hundred dollars over the use of the device. And as good as their interface may be, I don’t. I suspect most of their other potential customers feel the same way.
Even the terminology “lifetime subscription” is offputting. Who wants to commit to a product platform for life? Obviously, you can stop using your TiVo whenever you like, but my point is that the term “lifetime,” while meant to imply a simple amortization, also implies a heavy, lifelong commitment. Appealing to true believers, perhaps, but not new converts.