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TiVo raises their rates

Holy cow. That's my first reaction to TiVo raising their monthly rates to as high as $19.95/month. The 1 year service plan will bump from $12.95 to $19.95, the 2 year will go to $14.95, and the 3 year contract will retain the $12.95.

I know why companies do this, but frankly these price jumps are way too big and may ultimately do a lot of damage to the company. I'm surprised that we're seeing another rate change given the last one bumped from $9.95 to $12.95 and feels like just a couple years ago. I guess they tested the waters with the earlier free-tivo-for-a-higher-monthly plans and figured they could raise the rate and do ok.

HDTVs are flying off the shelves making the series 2 boxes less important every day, but the HD series 3 boxes are already priced at the high-end home theater market. I'm honestly not seeing a lot of new customer uptake of TiVos at these price points and wondering why on earth TiVo did this.

Are they going to be a profitable company if they slow down their new customer acquisition? Is customer loyalty high enough that they can raise the rates and retain them? Did TiVo suddenly realize maintaining a huge customer userbase was a bad idea for the long term health of the company?

Engadget mentions another slap in the face to customers today: WPA wireless security is now supported, but only for the official TiVo wireless adapter. That's disappointing to see limited to one device.

by Matt Haughey November 6, 2006 in TiVo

Comments

If possible, lets start a campaign to let them know that we will not stand for this. $20 per month? For $10 I can get a box from my cable company. My contract ends next month...if my rates go up, away goes my Tivo. Do they KNOW what they are doing?

Posted by: David at Nov 6, 2006 5:06:08 PM

The price hikes do seem steep. However, I'm not sure a new feature counts as a "slap to the face." It's entirely possible that getting WPA to work on the other devices (where pretty much everything has to be done in software) just couldn't be done without bogging down the CPU any more than it already is on some of the units.

Posted by: Chris Lawrence at Nov 6, 2006 6:04:38 PM

I canceled two Christmas TiVo orders this afternoon in light of the news.

I'll happily put up with the awful UI of Windows MCE rather than suffer $19.95 on my TiVo upstairs.

Kiss it good-bye, folks. I fear this is the end...

Posted by: B at Nov 6, 2006 6:08:24 PM

Shrug. I have a dual-tuner HD DVR from Time Warner, integrated into my cable box (i.e., no need for more space). I pay nothing down and $8.95 a month - and I get free upgrades to the hardware when they release them.

Now they're raising it even more... truly shocking.

Posted by: Tim Marman at Nov 6, 2006 6:39:54 PM

I was going to upgrade my DirecTV to HD, but I couldn't get a Tivo as my DVR, they wanted too much money, and they weren't offering any deals. Knuckleheads. So now I'm switching to digital cable.

I love my Tivo. I discovered TV again. I was all set to get a Tivo S3 until I saw the steep price tag plus the insane monthly cost. My DirecTV Tivo was $5 extra a month on top of my DTV bill. $19.95/month is insanity.

So, I'm settling for Optimum's HD DVR with dual tuners. Can it record two HD programs while watching an already recorded show? Yup. Is it a Tivo and does it have the best interface? Definitely not. Then again, it doesn't cost $800 + $19.95/month? It's only $5/month.

DirecTV and Tivo are seriously off-course; if they don't right their ships, they will sink.

Posted by: Eric Baker at Nov 6, 2006 6:49:32 PM

I was on the fence about switching to TW's HD DVR and TiVo just pushed me over. It was nice knowing you...

Posted by: brad barrish at Nov 6, 2006 6:54:44 PM

Is this just for new TiVo owners, or does the rate hike affect everyone? If so, I'm getting rid of my TiVo and will pay for the cable company's On-Demand service.

Posted by: RP at Nov 6, 2006 7:24:47 PM

I bought a Series 3 TiVo the day they came out.
I sent it back. The box is not ready. The Series 3 does not play well with the CableCARD. The CableCARD is an FCC mandated device that the Cable companies have to support and hate. There are so many issues with TiVo and the CableCARD, just look on the TiVo community web site and you will see the woes.
As far as TiVo raising thier rates, this is crazy! Ridiculous!
I am going to stick with my crappy HD SA 8300DVR from my cable company.
When will someone invent a true HD DVR that you can buy and not be chained to a monthly service fee. I am buying that box.
I used to LOVE TiVo, but like my ex-girlfriend I am kicking TiVo to the curb!
I am not longer saying "I TiVo'ed it last night," I am saying "I DVR'ed it last night".
Down with TiVo.
(never thought I would ever say that)
Greedy, Greedy TiVo!

Posted by: Colin at Nov 6, 2006 7:30:25 PM

I have 2 Tivos that I purchased outright. I really like the interface, but I am not willing to pay more than I already am for a glorified TV listing service. Tivo has soured a good thing. My wants from Tivo were simple... 1) don't raise the price 2) don't muck with the features and interface. Seems like they are working overtime to piss me off. I will be looking into an Apple iTV or Neuros OSD soon.

Posted by: Colin Scroggins at Nov 6, 2006 7:41:14 PM

I had it with these guys. Just paid %899 for HD)Tivo and #12.95 monthly. Now this! I had it with this company. Let their stock go to hell/

Posted by: jsjd kjsk at Nov 6, 2006 8:38:24 PM

Why do so many people fail at math? Put down the pitchforks and torches and actually think and look at the numbers.

They’ve actually simplified their pricing. There used to be one set of prices for bundles and one set of prices for service on retail boxes. Now they’re the same. So instead of twelve total prices, there are six (pre-paid or monthly, 1-, 2-, or 3-years). This raised the costs on service-only a bit, but they also bumped the rebate by $30 to $70 at the same time, to offset that.

In the end, out of 30 permutations (80-hour S2, 80-hour S2DT, and 180-hour S2DT bundles from TiVo.com, and 540 and non-540 rebate units from retail times the 6 pricing options) 21 of them *dropped* in cost. 1 stayed the same. 5 increased just slightly - $13.60-$15 for 1-year, and one $18 increase over 2-years.

There were only three (or two, depending on how you look at it) noticeably increases. The two 1-year monthly S2DT bundles each increased $40. The 1-year monthly non-540 retail net increased $54.

All of the three year plans dropped, up to $154 off the old prices. All but one two year plan dropped, the exception went up $18 spread over 2 years.

One 1-year plan stayed the same. Four of them had only minor increases, $15 or less. With the remaining three showing real increases.

Overall, this is a price decrease more than an increase.

As for their last increase, as I recall that was in mid-2002. More than a couple of years ago.

And with WPA, remember that the TiVo adapter has an onboard processor which has been used, to date, to offload network processing from the TiVo's CPU. Note that in user tests that gives the TiVo 11g adapter up to 60% higher performance. Now, where do you think the WPA processing is done? That's why it is limited to that adapter. You do NOT want WPA on the TiVo CPU with another adapter, it'd crawl.

Posted by: MegaZone at Nov 6, 2006 8:53:16 PM

Thanks megazone.

Posted by: Tyson at Nov 6, 2006 9:22:50 PM

Colin - Sorry you had such a bad experience with your S3. I got one and the box was defective (wouldn't tuner some analog channels on 1 of the tuners). I exchanged it and all is well. My girlfriend loves it.

I also have a PC, running Beyond TV with 3 HD and 4 SD tuners. The S3 doesn't have enough HD tuners for me, but it compliments my Beyond TV setup very nicely. Being able to timeshift and record premium HD channels without a crappy cable company DVR is great.

Posted by: Grant at Nov 6, 2006 9:43:19 PM

I am extraordinarily disappointed. I purchased outright 2 40-hr Tivos, one for upstairs and one for downstairs. For now, I'll start looking at alternatives, and within a few months, I'm sure that I'll dump one of the Tivos and switch to some solution that is non-subscription. And I'll keep looking for a good solution to get rid of the first Tivo. This will be tough. My wife loves the Tivo interface. My 4- and 5-year old kids can click over to their favorites. It will be tough getting them used to a new solution. Then again, I guess that's what Tivo, Inc. is counting on.

Posted by: George at Nov 7, 2006 10:22:44 AM

megazone, quite the contrarian view, but with actual data! With the complete silence from Tivo, could you post a table doing that comparison?

Posted by: hfm at Nov 7, 2006 10:39:12 AM

This could also be a sign that Tivo doesn't think they will get many more customers. As a result, the question is how much money can they extract from their current customer base to maximize revenue.

It's sad, because it would be an admission that Tivo does not have growth in the future. Growing companies tend to grow by lowering prices. There is a great piece in Costco in the recent issue of Fortune magazine that highlights this.

Adam

Posted by: Adam Nash at Nov 7, 2006 10:49:24 AM

Megazone, did they cancel the month-to-month plan and require at least a 1-yr contract for every customer?

Posted by: Matt Haughey at Nov 7, 2006 2:13:11 PM

jsjd kjsk,
I appreciate your thoughtful post about the cost increases being actual decreases, but I think you are missing the real point that all of us are making.
The DVR should be a box that we buy once and be done with it.
Program guides should be available from TiVO for FREE. If they need to increase their revenue, why not try banner ads during fast forward.
License the TiVO software to Motorola, SA and the other Cable Box makers. Partner with the cable companies in their DVR's.
Face it TiVO, you are about to be bounced out of the market as other DVR makers catch up and offer services for free.
Embrace your customers, make it easy for us to own TiVO's and be creative on your revenue stream.

Posted by: Colin at Nov 7, 2006 3:11:33 PM

Matt,

Actually, that was done a while back. It has not been possible to do a service activation without a minimum of a one-year commitment since the last pricing change early in the year. Even on a used box, any new activation came with a 1-year commitment.

Colin,

TiVo's data shows the opposite. They they offered the option of lifetime - the buy once and be done option - fewer than 20% of customers opted for it. Most of their customers opted for monthly fees.

Then when they trialed the bundle pricing, that got an even stronger response, with customers prefering the bundles. That's why they switched their pricing and part of why they dropped lifetime.

TiVo determined that users wanted a low, or zero, entry cost and were willing to pay more monthly to get it.

Posted by: MegaZone at Nov 7, 2006 4:36:14 PM

hfm - Good idea: http://blog.tivolovers.com/373587.html

Posted by: MegaZone at Nov 7, 2006 6:23:11 PM

I'm a long-time tivo lover and I'm one of those people that opted for the monthly charge as long as I thought it was worth the price. Just like Netflix, Xbox Live or anything else. But it's not worth $20 a month. I have Verizon Fios TV and they offer HD DVRs at $10 a month and HD DVR Home Media Center for $20 a month. So for $20 a month, I can record in HD, distribute SD recordings to every TV in the house that has a basic cable box, plus music, photos, etc. Now THAT is worth the price. Goodbye Tivo...it was fun while it lasted.

Posted by: Stefan at Nov 7, 2006 6:35:08 PM

Past performance doesn't guarantee future earnings :), what customers where willing to do in one market place snap shot is not even remotely suggestive of will happen in the current market pace, and the forces are changing even more greatly next year.

Lets see, 899 for a tivo s3 and 20 bucks a month. Or a MCE vista box, and bet I can get one next year for a lot less then 899 with ZERO monthly fee? Hard choice.

20 bucks a month, or zero for mythtv, Sage tv, replay, yahoo tv.. the list goes on. 20 bucks a month for tivo + 899 cost or 5 bucks a month for the comcast craptastic 6412, I'll admit it's a little more dubious proposition but still at the end most people will go cheap and (including me and I already own a HD direct TV Tivo) live without feature richness, features that might come in time (or more likely not).
This is what is called pricing yourself out of your own market and it's insane, nobody should be shelling out for guide data that is already free from every other source, raising the price is just insult to injury. Tivo has been on constant endless quest to marry it's self off to that sexy Hollywood machine at a steady decline of their core product and on the back of their actual paying customers. I want them to live on because competition is the only thing that will keep this market place from going completely down the DRM crap hole, but think Tivo just might manage to annihilate themselves before somebody can really buy them while they are useful.
Add on deal ike the 360 getting direct streaming, and bet a MCE back haul for storage soon, and well.. what are you doing Tivo but stealing money from my pocket...

Posted by: Griffon at Nov 7, 2006 8:02:40 PM

What an idiotic move on the part of Tivo.

Rationalizing the $700 Series3 was hard enough before these increases. Now it's almost laughable.

I miss you Tivo, but not nearly that much.

Posted by: Marklar at Nov 9, 2006 7:41:03 AM

I have a Lifetime on one TiVo, and pay $6.95/month for a 2nd TiVo, which is not under any contract. Will that rate increase?

Second, my grandmother has a TiVo that I bought on Amazon a couple months ago, and we're paying $12.95/month. Will that rate go up?

Or are we only talking about new contracts?

Posted by: Andy at Nov 9, 2006 9:04:02 PM

This is the first time in over 7 years I'm seriously considering leaving TiVo.

My concern is, I'm on a month-to-month $12.95 deal and have been since I bought my current box two years ago. I was considering moving to an 80-hour box but really, really, really don't want to do a 3-year signup. To me (even though I've had TiVo forever), it's not worth it; I don't trust TiVo as a company anymore. Their product, sure, but not their company.

More than that, trying to convince people to shell out $15-$20 per month for TiVo (with a contract!) versus the Comcast DVR is very difficult. I think TiVo just marginalized themselves, in time for the Christmas buying season. Hooray!

Posted by: Paul at Nov 10, 2006 11:55:03 AM

You can no longer get the $6.95 monthly rate for that second DVR unless you sign a 3 year deal. Pretty dumb tivo. Best bet try to get your hands on a pioneer or toshiba unit on e-bay. Comes with lifetime basic service and its completely free!!!!!!!!No monthly fees!!!!!! Only downfall a 3 day program guide instead of 14 days but you can still program out past the 3 days as long as you know what day and time the show you want to watch is on.You will also miss some other features but who cares. A free tivo service as long as they stay in business!!!!!!

Posted by: Barry at Nov 15, 2006 4:51:07 AM

There's still a way to win from all this... short Tivo stock.

Posted by: slim at Dec 4, 2006 10:58:00 PM

Thanks megazone.
---------
http://www.dl4all.com

Posted by: Michael at Dec 11, 2006 1:26:26 PM

Man, this sucks.

I just reactivated a old TV box after a year of using a COX dvr. First the price increase and now 1 year contract required. This is bullshit! The price increase is one thing but the 1 year contract is just plain stupid. I used to curse the cox DVR and praise Tivo...Now they both suck!

I never thought I would say this but Tivo Sucks!

Posted by: T.E. at Dec 28, 2006 6:02:51 PM

Come on, guys. Are we all falling victim to the Walmart mentality? Anything is OK as long as it's cheap? The TiVo experience is still worth it!

Posted by: Jim at Feb 17, 2007 6:30:53 AM

I'm pretty behind the times, and ready to get a DVR now. Thanks for all the advice! No Tivo for me. Megazone's biggest flaw in the "most prices going down" argument is that only a small number of the Tivo & potential Tivo customers will be buying the box. Most people in this group (the current customers) are totally mucked by this deal, now pricing them insultingly further out of the value of the product being offered. How much does an electronic TVguide serivce cost TIVO to run? $0.10 per customer per month? There's more markup here than movie theater popcorn.

Posted by: DVRcurious at Apr 28, 2007 5:15:43 PM

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