TiVo Sees Sub Jump, Courts Cable


Banking on the growing buzz around digital-video-recorder technology, TiVo
Inc. pulled in a record number of new subscribers in the second quarter and
announced that it will be raising its guidance for the remainder of 2003.

The San Jose, Calif.-based pioneer in DVR service pulled in a record 90,000
new customers, more than doubling the number of new adds posted in the second
quarter of 2002 and bringing its total to 793,000.

More than one-half of its new business -- some 56,000 subscribers -- came
from sales through direct-broadcast satellite provider DirecTV Inc., with the
remaining 34,000 recruited to TiVo directly.

TiVo’s net revenues for the quarter totaled $26.7 million, with $17.4 million
coming from services and technology licenses and $8.1 million from hardware.

Gross profit totaled $11.1 million, down from the $16 million reported in the
second quarter of 2002, although the latter included recognition of a lump-sum
revenue influx from Sony Corp. covering work and fees from multiple

The company’s operating loss came in at $4.4 million, up from last year’s $3

During a conference call Thursday to discuss the earnings, president Marty
Yudkovitz detailed TiVo’s efforts to recruit cable-operator partners, noting
that while no deals have been forged yet, the company was "right on track and
where we hoped them to be at this stage."

TiVo’s pitch is aiming for MSOs’ three top priorities these days -- producing
added revenue, lowering operating costs and cutting churn. The vendor has
already proven its revenue-generating capabilities through its own increased
income in the past year, and it can also save cablers money when it comes to
deploying DVR systems that require constant upgrades, Yudkovitz said.

"It takes the [research and development] burden off the MSOs' shoulders," he
added. "We are the low-cost provider."

As for churn, Yudkovitz pointed out that TiVo’s partnership with DirecTV has
already cut churn for the DBS provider by two-thirds.

"This resonates very well with the MSOs. The response has been very positive,
and again, I would characterize the progress as being right on track," he