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TiVo Will Try HD Rebate to Ignite Growth
Monday, May 21st, 2007 at 4:00 PM - by John Martellaro
TiVo will launch a Fathers Day mail-in rebate of $200 on its Series 3 HD TiVo unit. The offer will be good for a month. However, TiVo is in trouble, and this rebate may not be enough to trigger interest, according to TVPredictions.com.
The TiVo Series 3 retails for US$799. (Amazon sells it for US$606.95). Considering that many customers can have a DVR delivered by their cable or satellite company for a modest rental fee, TiVo may be falling behind the times. Phillip Swann at TVPredictions said that, with HDTVs in 30% of U.S. households, TiVo needs to cut the price far more.
"We will be highly focused this year on moving forward with a lower-priced, mass appeal High-Def unit, which will allow us to much better participate in the HD television trend," TiVo CEO Tom Rogers said in March.
Mr. Rogers assessed the problem and trends. "The other clear learning at retail is that High-Definition television sets are the most important new consumer electronics item," Rogers told Wall Street analysts in a conference call. "Given the price of our HD unit, we were not able to meaningfully participate in that trend. This also clearly contributed to lower sales volume compared to a year ago, when this trend was nowhere near as significant."
TiVos growth in the last year has been very modest and remains at about 4.4 million customers (at the start of 2007). Recently, TiVo released a pair of commercials that differentiates their product from carrier DVRs, but they have yet to introduce a HD TiVo that doesnt come with a massive sticker shock. Theyll certainly be watching the rebate campaign closely to determine the effect of the rebate and how appealing their current HD product is.
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