TiVo Eyes Breakeven3/08/2002 8:42 AM Eastern
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.