TiVo Eyes Breakeven
By Monica Hogan -- Multichannel News, 3/8/2002 11:42:00 AM
In a year-end earnings call late Thursday, TiVo Inc. executives told Wall Street analysts the company expects to become cash-flow positive within its current fiscal year.
The company plans to reach the milestone through a combination of increasing subscriber revenues and eliminating hardware subsidies.
Earlier this month, TiVo announced that it would raise its monthly service fee for subscribers from $9.95 to $12.95. Customers who own combination TiVo digital-video recorders and DirecTV Inc. direct-broadcast satellite receivers are exempt from the price increase.
Under a limited-time promotion, existing TiVo customers can opt for lifetime service for a fee of $199.95, a spokeswoman said.
TiVo chairman Mike Ramsay said that while it's too early to predict whether the 'relatively modest' 30 percent price increase will lead to subscriber churn or slower sales of new TiVo units, he believes the DVR service provides 'ample value for the price point.'
Perhaps more important, the price increase will help TiVo in its 'financial quest for profitability,' Ramsay said.
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