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    By Group 10 - Section B

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    shubham jain
    TiVo was an innovative digital video recorder service that allowed users to pause live TV, record shows, and skip commercials. However, it struggled early on with low adoption rates of around 0.04% due to high prices of $499-$999, a lack of brand awareness, and resistance from networks and advertisers. TiVo partnered with companies like Sony and Philips to manufacture set-top boxes and reached deals with retailers like Best Buy to boost distribution. While it provided valuable features, TiVo faced threats from competitors and needed to improve its communication strategy and lower prices to appeal to everyday consumers on a mass scale.

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    By Group 10 - Section B

    Uploaded by

    shubham jain
    36 views15 pages
    TiVo was an innovative digital video recorder service that allowed users to pause live TV, record shows, and skip commercials. However, it struggled early on with low adoption rates of around 0.04% due to high prices of $499-$999, a lack of brand awareness, and resistance from networks and advertisers. TiVo partnered with companies like Sony and Philips to manufacture set-top boxes and reached deals with retailers like Best Buy to boost distribution. While it provided valuable features, TiVo faced threats from competitors and needed to improve its communication strategy and lower prices to appeal to everyday consumers on a mass scale.

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    Case on Tivo

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    Group10_TiVo

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    TiVo was an innovative digital video recorder service that allowed users to pause live TV, record shows, and skip commercials. However, it struggled early on with low adoption rates of around 0.04% due to high prices of $499-$999, a lack of brand awareness, and resistance from networks and advertisers. TiVo partnered with companies like Sony and Philips to manufacture set-top boxes and reached deals with retailers like Best Buy to boost distribution. While it provided valuable features, TiVo faced threats from competitors and needed to improve its communication strategy and lower prices to appeal to everyday consumers on a mass scale.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    36 views15 pages

    By Group 10 - Section B

    Uploaded by

    shubham jain
    TiVo was an innovative digital video recorder service that allowed users to pause live TV, record shows, and skip commercials. However, it struggled early on with low adoption rates of around 0.04% due to high prices of $499-$999, a lack of brand awareness, and resistance from networks and advertisers. TiVo partnered with companies like Sony and Philips to manufacture set-top boxes and reached deals with retailers like Best Buy to boost distribution. While it provided valuable features, TiVo faced threats from competitors and needed to improve its communication strategy and lower prices to appeal to everyday consumers on a mass scale.

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    TiVo

    By Group 10 | Section B
    Kunal Sadhwani 19P089
    Lokesh Raizada 19P091
    Mansi Mangla 19P092
    Mithilesh Verma 19P095
    Shubham Jain 19P115
    Vamsi Krishna 19P117
    Introduction to TiVo
    Background:

    ● Average Household has 2.4 TV’s and spent 7.4 hrs/day watching it
    ● Average adult spending 4.3 hrs/day in watching TV
    ● Avid consumers were ironically called couch potatoes
    ● Popular shows between 8 to 11 pm with audiences larger than 25 million viewers
    ● Technology changes with TV have been slow
    ● Founders Jim Barton and Michael Ramsey focus shifted from home network technology to TV
    ● Fourteen months into launch of TiVo penetration was only about 0.04%
    ● Need to change customer rituals on a mass scale
    What TiVo does
    Takes feed and turns it into digital video

    Reduction of marketing and consumer research costs 20-30 perecent in coming years

    Enables pause/fast forward/record

    TiVo box provided four quality pre-sets from “best” to “basic”

    TiVo can track and record their favourite shows without help from the viewer

    EPG options include live TV and “Now Playing”


    Pricing
    ● Box pricing: $499 - $999 (based on recording capacity)
    ● Subscription: $9.95/month, $99/year, $199 for life time
    ● To access TiVo’s system of personalized suggestions and automatic recording of favourite shows subscription was
    needed

    Collaborators
    ● TiVo established partnerships with SONY and PHILIPS, to manufacture the black box distribution and promotion
    to the retailers.
    ● Made nationally available through Best Buy in Sept 1999.
    ● By Oct 1999, Circuit city and Sears started carrying black box
    TiVo as a threat

    For Networks:

    ● With TiVo, commercial space at 2:45 a.m. might be just as valuable as commercial space at 8:15 p.m.
    ● Networks lose the ability to position a popular show at prime time and then count on enough consumer inertia to put
    a new show behind it to promote it.

    For Advertisers:

    ● The conventional way that advertising agencies sold media space to marketers—on the basis of reach—would be
    jeopardized.
    ● TiVo also the gave the option to fast forward the commercials and allowed consumers to be exposed to commercials
    only on an opt-in basis.
    TiVo as an opportunity
    For Networks:
    ● Networks could track how many people were scheduling a show for future recording.
    ● Networks could also establish audience size and characteristics in advance, in order to market advertising slots more
    effectively.
    ● The season pass guaranteed that viewers would not miss any episodes of their favourite show, increasing regular
    network viewership and loyalty.

    For Advertisers:
    ● Advertising can become more relevant and interesting because of personalization and targeting that TiVo offered
    ● TiVo could help advertisers track and predict the television audience
    ● Advertisers could know how many people fast forwarded the commercial and the aggregate profile of those who
    didn’t.
    Customer Analysis
    71% 56%
    40% 30%
    Friends or Publicatio
    Store staff Television
    relatives n and
    advertising advertising

    ● 62% TiVo owners watched more TV than without


    ● According to 31% owners TV was the primary source of entertainment
    ● 59% said that they watched programs that were once unavailable to them because of inconvenient scheduling and there was a
    31% decrease was also observed in channel surfing
    ● Children’s programming and dramas were the most recorded programs with the situation comedies following closely.
    ● TiVo’s data showed that subscribers were fast forwarding through 90% of commercials. This proved that they didn’t
    particularly like 30 second commercial that were not specially available to them
    Competitor Analysis
    Criteria Replay Network Microsoft Ultimate TV TiVo
    Brand Leverage Low High Low
    Distribution National coverage started in Nationally available through BestBuy
    Channel 2000 and electronic chain
    Service fee Nil Subscription based Subscription based model with
    additional charges
    Collaborators Was its own manufacturer Thomson and Sony Sony and Philips
    Direct Tv
    Features Quick Skip Watching/recording 2 shows simultaneously, EPG gave access to previews for
    recording pay per view movies, 30 sec skip shows that could be scheduled for
    and fast forwarding upto 300 times the normal recording
    speed
    Pause live tv, search tool and TiVo produced video magazine and an
    ability to record programmes Offering Satellite TV on collaboration with on screen guide
    through an electronic Direct TV and advanced features, interactive
    program guide TV and personal video recording Season Pass and thumbs Up and
    Thumbs Low button
    Surfing and sending email through TV

    Other Competitions-
    ● Jovio: It had announced its intentions of launching a free service that would be similar to TiVo's
    ● Seagate Technology and Thomson Multimedia: Announced a joint venture to put their own hardware inside the television set
    ● Miscellaneous: Conventional VHS video recorders and DVD Players were already present in the market at lower prices.
    SWOT Analysis

    STRENGTHS WEAKNESS
    • Innovative Product • Lack of Brand Awareness
    • Brand Equity • Confusion regarding brand
    • Interactive Services • Lack of Marketing
    • Customer Loyalty • Expensive
    • Product Quality • Over reliance on partners

    OPPORTUNITIES THREATS
    • Diversification • Low Barrier to Entry
    • Advertising • Inability to skip ads
    • High Market Growth • Many heavy weight competitors
    • Unique features • Over reliance on single supplier
    Perception Map High Price

    DVD- Video Recorder

    Replay TV

    Low TiVo High


    Functionality Functionality
    Ultimate TV

    VCR

    Low Price
    How effective their Communication Strategy was?
    Point of Parity:
    ● Similar to VCR in terms of watching videos at own will and recording video

    Point of Differentiation:
    ● Pause live TV
    ● Record digital video of better quality
    ● Skip commercials

    Result of this:
    ● All the ads were based on humour and engagement instead of conveying the point of differences
    ● This led to confusion among the customers as to exactly what TiVO is
    Problems Faced:
    Hard for nonusers to understand – Complete new category of product, Inability to change TV
    consumption habits of the consumer

    Time taking in store marketing process to explain the product and the features to the customer

    Networks and Advertisers fear that customers will skip the commercials

    Increasing competition

    Getting to the right price for the product

    Very low early adoption : Improper targeting & positioning


    Decisions available to TiVo:
    Should TiVo be bundled with DirecTV/AOL?

    How to correctly price the product so as to maximize profits and the market share? ($999 or $399)

    Which consumer segment to target? (Early Adopters/ Trend Setters or Mass market/ Everyday
    consumers)

    How to market the product to that customer segment?


    Recommendations
    ● Focus towards more on everyday customer by using lower prices and price the product at $399, focus on increasing the market share than
    the revenue per customer, since only 0.04% of market is captured and there is huge potential in the market. Also, since the consumers are
    not familiar with the product, prices need to be low to encourage adoption and can be increased subsequently when enough percentage of
    the total market have adopted the product.
    ● Also, initially 3-month subscription can be provided to buyers of TiVo to let them experience the full benefits of the products and post that
    usual subscription prices can be charged. This will help in increased word of mouth marketing in initial months if complete package of
    benefits are provided. Also, since it’s a new service, giving the customer an experience is important in order to let them decide whether this is
    valuable to them or not.

    ● Focus on training the workforce to provide sufficient support and knowledge to prospective customers

    ● Integrated Communication for creating better brand awareness through:


    1. Lifestyle commercials on TV
    2. Feature in print media
    3. Demos on websites and popular places like malls, large retail stores etc.
    Thank You!

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