Hey TiVo, Ditch the Subscription!

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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.

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16 Responses to Hey TiVo, Ditch the Subscription!

  1. bimtott says:

    I have been extremely impressed with the attention Tivo has given its lifetime subscription holders. Unlike other recent BB posts about companies leaving their customers high and dry (like MLB), they are not trying to sunset early Tivo lovers. The cost of lifetime subscriptions or transfers is worth the better service, and I am sure Tivo will continue to make sure its paying customers stay satisfied.

  2. eigafan says:

    I’m still waiting for the Tivo software option from Cox Communications and Tivo. But I’m afraid that they will raise my monthly digital cable bill. I’ve read that Comcast has recently started offering the Tivo option.

  3. Merc says:

    Oh no, they definitely claim they’re monitoring what you watch, down to the second. They know when you fast forward a commercial, which bits of a show you replay, etc.

    The part they claim not to be doing is attaching personally identifiable information to that data, so they can then say “72% of people watched this commercial”. If you look, I think last Superbowl or maybe the one before that, they had all kinds of stats about what ads people watched most, which ones they watched more than once, I think they even said that more people watched the commercials than the game.

    Screen scraping used to be the way to get listings data, but it’s against the terms of service for the websites, so a product like mythtv that contained a screen scraping component could get in trouble.

  4. Stefan Jones says:

    My MythTV box gets its listings from Schedules Direct, which charges $30 / 6 months. They’re trying to reduce that to $30 / year.

    Schedules Direct was hastily set up after Zap2IT labs stopped offering free listings due to too much unauthorized commercial reuse.

    I think $5/month for listings is an OK deal, given how much nicer it is to find and schedule programs using an interactive grid than a newspaper listing.

  5. Merc says:

    My understanding is that TiVo doesn’t own or control the TV data, but instead licenses it from somebody else (Tribune Media Services?). TMS won’t grant anybody (including TiVo) a flat rate, instead they charge per user, and the cost is passed along.

    The schedules service available to open-source DVR systems (Schedules Direct) was initially going to have to charge $5/month to cover the costs of providing listings to its users, but has finally managed to lower it to just $20/year, but for a non-profit to charge $20/year to users of open-source systems shows that the price of these listings is very high. Unfortunately TMS’s contracts prevent groups from disclosing the rates they’re being charged, but it wouldn’t be surprising if TMS charged more to provide listings to TiVo users than to users of open-source PVRs.

    I’m pretty sure that everybody is charged for listings by TMS, including cable companies. The cable companies just build it into their service fees, so you don’t see that line item if you have a cable company set-top box.

    Oh, and by the way, the “lifetime” service for TiVo isn’t *your* lifetime, it’s the lifetime of the TiVo unit.

    • Joel Johnson says:

      Makes sense. I wonder what it would take to make TiVo start their own listings division. Aggregating all the listings data from all the stations around the country is no small task, but it would seem some competition is needed.

  6. Tim says:

    You don’t opt in to Neilson ratings systems. The company that runs it is afraid of people gaming the system to boost ad revenues to certain networks/shows.

  7. morkus says:

    I’ve long wondered why Tivo couldn’t offer two kinds of service:
    1) Normal pay-for service. Pay the monthly subscription, but no ads.
    2) Ad-based. Allow Tivo to monitor your viewership and to push Tivo-based advertising at you.

    If I could use the second option, I’d definitely be buying a new Tivo HD unit and moving my current series 2 to another television. As it is right now, I can’t justify the long-term costs.

  8. Merc says:

    Makes sense. I wonder what it would take to make TiVo start their own listings division. Aggregating all the listings data from all the stations around the country is no small task, but it would seem some competition is needed.

    I think the challenge of getting all the listings is not just a technical challenge of getting all the information, getting it right, putting it into a database, etc. I also think it’s a “schmoozing” challenge, making deals with the networks to let you know about their schedules weeks in advance, making sure they keep supplying you with updates, negotiating over the show summaries, etc. I’m also pretty sure that the deal they have is exclusive, and that even if the networks were willing to provide listings directly to TiVo, TMS would step in and prevent it.

    As for offering two kinds of service, TiVo is now making people pay for the service *and* monitoring viewership and pushing TiVo-based ads. Why would they want to change anything?

  9. JMan says:

    snwbrdwndsrf, the reason you get free TV listings with Windows Media Center is that Microsoft is swallowing the costs. They’ve gotta do something with the mountains of cash that they’re sitting on.

  10. the.name says:

    Actually MERC, they’re not even doing that anymore. As reported today by Reuters, TiVo will announce it will be offering viewers’ demographic information to advertisers as well.

    I love my TiVo and personally I’m okay with the subscription and am actually willing to have my viewing habits reported to advertisers. I like the shows I like and if an advertiser knows I’m watching it as opposed to completely missing me and lots of those like me because we might be under-represented by Nielsen’s horrifically awful statistics … well, maybe we’d still have Arrested Development or Firefly or any number of great, cult shows.

  11. JV says:

    This seems a bit weird from my perspective in the UK. I pay no monthly fee, and my DVR gets all the program data (up to a few weeks in advance) from the digital TV signal. I know some people in the UK who do use a TiVo, paying a monthly subscription, but it seems a bit mad if you ask me.

    It is in the TV stations’ own interests to make this information available. If there was an established database to which stations submitted their listings (perhaps for a fee covering costs), and from which customers’ DVRs freely downloaded information, then non-participating stations would lose out, since customers would be less likely to watch their programs.

    Of course, TV stations hate DVRs anyway, because nobody with a DVR watches the ads!

  12. morkus says:

    They claim they’re not monitoring what people watch. I’ve always felt like there’s no reason a Tivo couldn’t do double-duty as, for example, a Nielsen box as well. And why not? Toggle a little box in settings and let yourself become a Nielsen household, and accept a discount or free service for doing so.

    Also, I think the lifetime subscription is transferable to a new, same-series unit. For example, if my series 2 dies, I can buy a new one and transfer the lifetime subscription to it. I think.

  13. snwbrdwndsrf says:

    I find it interesting that you can get a Media Center box and listings are downloaded for free. And from the sounds of previous comments the price of Vista by itself would only cover the cost of a year or two of licensing from TMS.

  14. sexyrobot says:

    of course the open-source solution would be to scrape that program data from a variety of other sources…theres only a million or so online…

  15. Binaryloop says:

    Yeah… I totally agree with Joel on this one. I currently have a Dish Network DVR and it is included in the cost of my service. I’ve often considered getting a Tivo but, I won’t pay their subscription fee. I’m sure that in the future that it will become standard practice for cable / satellite companies to give out DVR’s to everyone who signs up. When that day comes…. Tivo is fucked.

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