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TiVo Announces New Pricing Plans

My friend Kirk Franklin wrote in that TiVo's anticipated pricing was announced, at slightly higher price points than before, and based off contract length.

TiVo announced new pricing plans today. "The product lifetime service option will be eliminated next week."

• The price for a TiVo box and a one-year service commitment is $19.95 a month or $224 prepaid
• The price for a TiVo box and a two-year service commitment is $18.95 a  month or $369 prepaid
• The price for a TiVo box and a three-year service commitment is $16.95 a month or $469 prepaid

I assume current customers will continue to pay just $12.95 a month. It's good to see TiVo move away from any hardware costs, that will certainly get more TiVos into people's hands, but the monthly fees are pretty costly when you throw in a standard $50-60 cable or satellite TV package.

I'm hoping the Series 3 boxes have cheaper monthly rates in exchange for the non-free hardware.

by Matt Haughey March 9, 2006 in News, TiVo

Comments

The lack of a lifetime subscription is a huge negative. I went to the TiVo site to see if there were any way to send feedback to that effect, but I can't see a way to do that.

I was considering getting a Series 3, but in this monthly subscription only model, I'm not interested.

Any way to send feedback to the TiVo corporation? I guess I'll just have to write them a letter.

Kevin

Posted by: Kevin at Mar 11, 2006 3:59:29 PM

There has been a lot of discussion on this at TiVoCommunity.com, including a FAQ posted by TiVo, and I've been posting info at TiVoLovers.com as well.

Lifetime is going away, they considered keeping it but it would have to be so expensive to be viable that it wasn't worth keeping. (Lifetime has been far too good a deal, bad for TiVo.) And since a small minority of subscribers went with lifetime, most subscriptions are monthly, it isn't seen as a big loss by TiVo.

Existing service-only plans do not change - $12.95/month or $6.95/month. There will also be 1, 2, and 3 year prepaid service-only options, the pricing will be unveiled next week.

Posted by: MegaZone at Mar 11, 2006 4:21:34 PM

I believe it unlikely that the lifetime subscription was both "a small minority of subscribers" and "too good a deal, bad for TiVo" at the same time. If it is such a small number, then it hardly seems likely to hurt TiVo.

I've influenced quite a few people to purchase TiVos, but I'm going to have a harder time recommending them over other DVR options in the future, and I'm unlikely to purchase any more hardware or subscritions from them.

I guess I'm part of that "small minority" they they don't consider sufficiently valuable to want me as a customer any more.

Kevin

Posted by: Kevin at Mar 11, 2006 5:10:22 PM

This will sell a lot of satellite dishes, considering most give (mostly) the hardware and only add ~$6 mo for the dvr service. Why would anyone opt for cable + 20 mo for tivo when the alternatives are far cheaper. Directv w/ dvr starting @ $50 (barring the unsual circumstances of course).

.02

Posted by: overweightgeek at Mar 11, 2006 5:40:18 PM

Of course, if as a lifetime subscriber I actually was a money-losing proposition despite purchasing their hardware and subscription, then they clearly need to either change their pricing or get rid of me as a customer. They appear to be choosing the latter.

This all strikes me as buying a car based on the monthly payment you can make, rather than the cost of the car. Or similar to rent-to-own models. Except in this one you never own.

Ah, well.

Posted by: Kevin at Mar 11, 2006 5:42:24 PM

I personally think it's crazy. As a lifetime person myself, while it's unfortunate they're getting rid of it, it dawned on me how expensive they're becoming. I honestly cannot see myself persuading my friends to spend upwards of almost $20/month on TiVo (even with $12.95 you still have to pay for the hardware, which I can't see getting them to fork out $200 for that, either). If TiVo couldn't get subscriber numbers up in large amounts lately, I don't see this new plan as any kind of incentive.

Posted by: Michael at Mar 12, 2006 1:47:20 AM

Lifetime subscriptions can be even worse than you think. Since they transfer with the unit, you can resell them on eBay. I purchased my Tivo in this way, so Tivo didn't see one red cent from me, although I've been a happy customer ever since.

Think about that for a minute - every Tivo sold as lifetime is just that - free service until it dies. Even a hard drive failure won't kill it (it's on the motherboard n flash somewhere). For such a cheap device, that's suicide.

I'll await their pricing on the Series3. I agree that the pricing they've presented above is not very compelling. I'd say steeper discounts are in order for people who take out longer terms ($1/mo for that second year? Why bother? All it does is dilute and confuse the pricing structure). For instance, if we accept Tivo's position that they can't go much cheaper (I'm sure they have LOTS of analysts looking at that), then why not $20/mo for 1 year, or $15 for 3 years? I'll bet then they'd lure a lot of people into the 3 year deals, just because of the "oooh, look how much cheaper it is over time" factor. Meanwhile, they'd get a more reliable revenue stream.

But what do I know. I'm a cheap bastard who paid $300 to someone on eBay for my lifetime Tivo. And since I fully support boycotting HD over both DRM and its constantly morphing technology, I have little to nothing to lose by this.

Posted by: Joshua Ochs at Mar 12, 2006 1:53:28 AM

"I'm hoping the Series 3 boxes have cheaper monthly rates in exchange for the non-free hardware."

What would lead you to hope that..? I can't see any reason they would introduce this pricing plan a few months before the Series 3 comes out, only to change it when the new hardware is launched. I think we're stuck with this. No more chance to just buy the hardware - even without the lifetime option this time around, I'd still have rather paid $12.95 per month than $19.95.

I really don't see that upfront hardware cost is what is limiting Tivo's market penetration.

Posted by: GadgetGav at Mar 12, 2006 3:50:14 PM

Damn! I was hoping to get a Series 3 and LifeTime service. Oh well, guess I'm sticking with my Series 2 with LifeTime service.
I was irritated that Series 2 did NOT include digital audio out, but I'll put up with that to NOT pay monthly.

Posted by: Jeff at Mar 12, 2006 7:38:06 PM

I do not find the price all that high, well, in relation to what other companies are doing. My local cable company gets 14.95 a month from me for my DVR and it doesn't have half the features of a TIVO. And I have to pay for cable on top of that.

Posted by: Kent at Mar 13, 2006 8:11:57 AM

I really like my Tivo. I was planning to buy another Tivo. Now, I'll never, ever buy another Tivo again. The Tivo interface is very nice and easy, however at the heart of this issue, Tivo offers EXACTLY the same service as cable company DVRs. Tivo offers EXACTLY the same service as home-built computer DVRs. If Tivo flatly refuses to offer lifetime subscriptions, everyone should boycott them, and tell others to do the same. It's an insult. I hope they go out of business soon out of principle. Even though I like my Tivo, I just can't stand for a company to treat customers like this.

Posted by: Tivoboy at Mar 14, 2006 6:54:26 PM

Tivo needs to decide if they are selling a product or a service. They can't have it both ways. If it's a service, the hardware is free or nearly free with a signed committment (like cell service) and the revenue comes from the monthly fees. If it's a product, it's like a computer sold with operating system. You pay up front and the service updates are free.

Posted by: z at Mar 22, 2006 8:36:48 AM