TiVo - a. It is not a good idea for TiVo to have both...

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a. It is not a good idea for TiVo to have both stand-alone sales and mass distribution. There is a tradeoff between the two methods. Jeff Klugman, senior VP of the service provider division and of advertising operations, said, “You need to have almost 10 times as many [mass distribution] subs to make up for the lost revenue of a stand-alone sub.” The advantage of the stand-alone sales is that the customers were directly linked to TiVo. TiVo has more innovative freedom when it is directly selling units to its customers. The stand-alone boxes initially did not attract lots of customers. This was due $800 price tag on the TiVo product. Another problem TiVo had was that the box was difficult for consumers to set up. This led to costs of $15 to $20 million for customer service. TiVo spent about $51 million on research and development in 2006. Most of the $51 million was spent on advancing the features on the stand-alone DVRs. TiVo made money from partnerships with other companies.
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This note was uploaded on 09/23/2010 for the course BMGT 381 taught by Professor Dawson during the Spring '10 term at University of Maryland Baltimore.

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TiVo - a. It is not a good idea for TiVo to have both...

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