Technology

TiVo Discount Escalates DVR Battle

9/09/2005 8:00 PM Eastern

Less than two months after cutting the price of its digital video recorders to $99, TiVo Inc. has slashed the cost of its 40-hour receivers to just $49.99. Consumers can get the bargain price after shelling out $199.99 for the DVRs, and mailing in a $150 rebate form.

“Whether you’re new to the service or finally getting one for every TV in your house, at $49.99 after rebate, there’s no reason not to bring the TiVo experience into your life,” TiVo CEO Tom Rogers said in the announcement of the DVR promotion.

Rogers recently warned Wall Street analysts that TiVo’s profits would take a hit because of aggressive marketing tactics designed to drive subscription growth.

Since TiVo will continue to charge monthly subscription fees for its service of $12.95, its DVR service will still cost consumers more than DVRs leased from cable or satellite companies. Most cable operators charge about $9.95 per month to lease set-tops equipped with DVRs and hard drives.

Former TiVo partner DirecTV Inc., which recently said it would stop marketing TiVo DVRs in order to pitch its own DirecTV-branded recorders, is currently running a promotion that offers a bigger discount than TiVo.

Until Nov. 5, both new and existing customers can get a DVR from DirecTV for $99, including a $100 mail-in rebate.

TiVo, which counted 3.6 million customers at the end of August, also faces stiff competition from cable operators, including Comcast Corp. and Time Warner Cable, which lease DVRs from Scientific-Atlanta Inc. and Motorola Corp. to subscribers.

Comcast cut a deal earlier this year to offer subscribers the option of leasing TiVo set-tops. But Comcast’s rollout of TiVo set-tops won’t begin until next year at the earliest, and even then, the TiVo service will only be offered as a premium option for customers.

TiVo is also attempting to get its subscribers to encourage friends and family members to buy TiVo receivers. Last week, the company announced the search for a “TiVo ambassador,” which it said would “lead its legion of fans to spread the word about the celebrated ability of TiVo to revolutionize the way we watch TV.”

TiVo customers have until Dec. 31 to enter the contest, which will require them to shoot a creative video demonstrating why they should be an ambassador, in addition to writing an essay and getting a friend to recommend them for the position.

The company is also running a “Passion Pays Off” sweepstakes until Dec. 31, in which subscribers who get friends to sign up for TiVo service will be entered into a weekly random drawing for a chance to win $1,000.