Case Study

Introduction

TiVo was incorporated in 1997 they intended to create an interactive television system that developed the idea of recording digital video on a hard disk. TiVo allowed consumers to watch their T.V shows when they wanted to watch them by recording, playing back, and pausing live television. TiVo has now bundled its services with many companies, but at one point Direct T.V accounted for 70% of TiVo?s costumers. Effective marketing and innovation have made TiVo the best known DVR in the industry. TiVo has always considered itself as a hardware provider and a service provider and now seem to be shifting to an all service future. Despite having the strongest brand name and one of the largest customer bases TiVo has suffered millions in operating losses. In 2003 a massive transaction from analog to digital DVR?s took place. TiVo has been quick to respond to changes in the market by upgrading the features and refining performance. But, the new digital technology has caused TiVo?s market share to drop as competition grows quickly.

Opportunities

The embryonic DVR industry is a huge opportunity for TiVo. The market for television related devices is enormous. The demand for DVR?s is rapidly growing as first time consumers are becoming more familiar with the products this gives TiVo the opportunity to get new customers without taking market share. TiVo also has the opportunity to mass produce a more basic upgradeable model of their DVR for less cost and eliminating the monthly fee. The more basic model could possibly cause TiVo to lose monthly revenues, until systems are upgraded, but would allow TiVo to lower cost and conserve engineering resources. TiVo also has the opportunity to enter into new partnerships with cable and satellite providers as the demand for DVR?s increase and more television providers gain interest. Last, TiVo has the opportunity to conduct its operations on a global scale; America isn?t the only country that enjoys...