TiVo Community Forums Archives - At $6.95 per month, it's better than Lifetime Service.

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At $6.95 per month, it's better than Lifetime Service.
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Posted by: MediaLivingRoom

At $6.95 per month for the second, third TiVo, it's better than Lifetime Service.

It would take about 43 months to break even or 3 years and 7 months.

Posted by: rsnaider

I was thinking the same thing. And by the time you have broken even there will most likely be some new hardware that will need its own subscription.

Of course if you paid for the Lifetime, when something new did come out you would most likely still be able to sell the old box and get back the cost of the subscription.

I guess this argument has been going on since day one. :)

Posted by: Mike Lang

I still have my original box from '99 w/ lifetime and if I sold it today, I'd get most of that back on top of what I've already saved vs. monthly. Buying is pretty much always better than renting.

Posted by: timckelley

The newsletter is confusing. They say they're discounting the second box if you pay monthly. What if you go lifetime? Is it still $299? I have a second box in my house that is currently unsubbed. If I choose to lifetime it, will cost me $299?

Edit: I just read in another thread that it would still be $299.

Posted by: redrhino

quote:
Originally posted by Mike Lang
I still have my original box from '99 w/ lifetime and if I sold it today, I'd get most of that back on top of what I've already saved vs. monthly. Buying is pretty much always better than renting.

While you are a super moderator, I do have to disagree. For some people (probably not me), the $7/month is a better option than $300 upfront. The 40-some month payback is only relevant if you intend to keep the box for the entire time (or that you will sell it on ebay and recover your costs*) and if it works for the entire time. If you are like the guy who always needs the "latest and greatest" you may reasonably suspect that there will be a better TiVo later on that you would prefer and because of that, choose the $7/month.

I presume that you've factored the possibility of HD failure and the associated costs into your calculations, but Aunt Millie from California might view a HD failure differently, so she might perceive the monthly option as somewhat more attractive than you do.

There are some who will switch from upfront to monthly, effectively lowering the demand (and thus value) of the lifetime subscription.

Redrhino

*note: the effect of this action on TiVo's part is that the lifetime subscription is less valuable because demand for it is lowered due to the choice by some consumers to prefer the monthly option.

ps - I don't intend this note to sound snippy. Primarily I am writing it because I am lacking something to do with my time. I am also writing because I am trying to see if I can remember any of the economics I learned way back in the '80s.

Posted by: lajohn27

quote:
the effect of this action on TiVo's part is that the lifetime subscription is less valuable because demand for it is lowered due to the choice by some consumers to prefer the monthly option.

I agree that essentially that statement is correct for second, third etc receivers on an account. But for the first receiver on an account, the economics are essentially the same. $12.95 a mo or 299$ lifetime.

As for the value of Lifetime service.. Over time, the net effect could be the exact opposite; at least in the resale market on E-Bay for example.

Presuming the attractiveness of lifetime for people considering subbing a box starting today is reduced ...

With fewer new boxes (maybe) being "Lifetime Subbed" on an ongoing basis, a situation could develop where fewer "Lifetime Subbed" units are put up for sale on E-Bay.

Presuming demand for lifetime boxes at discount prices remains steady or only lowers slightly then simple economics would state that demand could outstrip supply causing the resale prices of lifetime boxes to increase slightly or at a minimum stay steady without signficant decline.

Economics is fun. Even when I get it wrong - as I bet I have here.. but .. someone will correct me. That's the fun of forums. :)

Posted by: pbanders

Where do you guys have your money, stuffed into matresses?

Very crude calc: I put $300 into a good blue-chip stock, my return is about 8% BT yearly. I get a return of about $24 a year, I hold it so that I get LT CG's so my overall (state/fed) tax rate is about 20%, leaving me with $19.20. A year of Tivo service on the 2nd unit costs me $83.40, so with the $19.20 I make from the stock, the actual cost to me per year is $64.20 (or $5.35 / month) meaning payback will actually take even longer, 300/5.35 = 56 months, or about 4 years 8 months. I'm CERTAIN I'll be upgrading my Tivo long before then.

It's a good deal.

Posted by: dgh

quote:
Originally posted by pbanders
Very crude calc: I put $300 into a good blue-chip stock, my return is about 8% BT yearly. I get a return of about $24 a year, I hold it so that I get LT CG's so my overall (state/fed) tax rate is about 20%, leaving me with $19.20.

In the four years that I've had lifetime, it has increased in value by 15% while my overall portfolio occasionally gets almost back up to where it started. In the 90s things would have looked different but for these last few years, lifetime has been a great "investment".

Posted by: mattack

quote:
Originally posted by redrhino
While you are a super moderator, I do have to disagree. For some people (probably not me), the $7/month is a better option than $300 upfront. The 40-some month payback is only relevant if you intend to keep the box for the entire time (or that you will sell it on ebay and recover your costs*) and if it works for the entire time. If you are like the guy who always needs the "latest and greatest" you may reasonably suspect that there will be a better TiVo later on that you would prefer and because of that, choose the $7/month.

You're probably one of the people who inexplicably keeps the car leasing business afloat, huh?

(Note, I don't disagree that it's much more attractive now monthly. I'm still not sure about the absolutes. Chop it in half again then I'd come pretty close to saying definitely monthly was better for secondary and higher Tivos as long as it wasn't going to spike back up later.. since the timeframe where lifetime would pay off would then probably be after analog broadcasts shutdown..)

Posted by: rogo

Not only would I almost certainly upgrade in <48 months -- what I believe is the payback, due to the time value of money -- but I don't necessarily believe my Tivo would cooperate even if I didn't.

What if it dies after the warranty is up and I bought lifetime? Ugh! No such risk with monthly.

Put the risk at 10% and the true cost of lifetime is $330 -- another 4 months worth of monthlies.

Put the risk at 20% and the true cost of lifetime is $360 -- 8+ months of monthlies.

Put the risk below 10% and I think you are really kidding yourself.

Mark

Posted by: c3

Since a dead unit with lifetime service still has resale value, the breakeven point is ($299-$value)/$6.95, NOT $299/$6.95. I would estimate the "$value" to be $200-$250.

Posted by: Georgia Guy

There's been much mentioned about upgrading. It seems that MANY of us Tivo nuts don't "Upgrade". We just add another box to our system, when a new fancier box comes out.

1. There's no eBay value, since we keep the older boxes.
2. Lifetime on the older boxes certainly pay for themselves if you simply keep them all (or if you give the older box to mom & dad, or whatever).

Supposed "dead box" worry:
Only once have I had to send in one of my Tivos, my oldest Sony (4 years old, approx) for a bad modem. Cost about $100 to fix out of warranty. Certainly a better option than just givinig up on it. Its still humming along today.

Posted by: c3

quote:
Originally posted by Georgia Guy
1. There's no eBay value, since we keep the older boxes.

Even if you don't sell the unit, the value is still there. A $10 bill left unused in a drawer is still worth $10.

Posted by: aciurczak

What c3 said, exactly.

And it comes up in every single one of these threads.

And it is always forgotten until the next thread.

'til then...

Posted by: Georgia Guy

quote:
Originally posted by c3
Even if you don't sell the unit, the value is still there. A $10 bill left unused in a drawer is still worth $10.

Moot point. Not talking some intrinsic value being stored in the unit until that glorious day when Its sold to the highest breathless bidder. Just talking practical value.

That $10 bill is going to get spent someday. Most people's (not all) Tivos are not going to be resold on ebay. If you want to "invest" in something for future value, consumer electronics ain't the best route to take.
Try rare coins, or stamps, even $10 bills, not a 5 year old tv recorder.

Sorry, but using "economic analysis" on a piece of consumer electronic's remainder value seems a bit futile, IMHO.

Posted by: MediaLivingRoom

quote:
Originally posted by Georgia Guy
Moot point. Not talking some intrinsic value being stored in the unit until that glorious day when Its sold to the highest breathless bidder. Just talking practical value.

That $10 bill is going to get spent someday. Most people's (not all) Tivos are not going to be resold on ebay. If you want to "invest" in something for future value, consumer electronics ain't the best route to take.
Try rare coins, or stamps, even $10 bills, not a 5 year old tv recorder.

Sorry, but using "economic analysis" on a piece of consumer electronic's remainder value seems a bit futile, IMHO.

hee hee, I would include buying a house. Then you could hold the TiVo. j/k

Posted by: dgh

quote:
Originally posted by Georgia Guy
Most people's (not all) Tivos are not going to be resold on ebay.

Could you break this down further for us? What percentage of TiVos end up where?

quote:
Originally posted by Georgia Guy
Just talking practical value. That $10 bill is going to get spent someday.

But that little slip of paper is of no practical value either until you find someone who will trade it for something you value.

Posted by: c3

quote:
Originally posted by Georgia Guy
Moot point. Not talking some intrinsic value being stored in the unit until that glorious day when Its sold to the highest breathless bidder. Just talking practical value.

That $10 bill is going to get spent someday. Most people's (not all) Tivos are not going to be resold on ebay. If you want to "invest" in something for future value, consumer electronics ain't the best route to take.
Try rare coins, or stamps, even $10 bills, not a 5 year old tv recorder.

Sorry, but using "economic analysis" on a piece of consumer electronic's remainder value seems a bit futile, IMHO.

Every single thread here about monthly versus lifetime IS is about economic analysis. Otherwise, there is no need for discussion. Other than the people who simply don't want monthly billing, most people want to spend the least amount of money for the usage of TiVo for a period of time.

Since your position is to keep the unit forever, then of course you want to get lifetime service. What if it breaks? If you choose to fix or sell it, that means lifetime service has a value. If you just don't use it or throw it away, well, who in the right mind would do that?

Posted by: rogo

"Most people's (not all) Tivos are not going to be resold on ebay."

My guess is that 4 of 5 end up in closets or landfills when they are retired or die.

In fact, I'd bet it's at least that high.

Posted by: mishagray

quote:
Originally posted by rogo
"Most people's (not all) Tivos are not going to be resold on ebay."

My guess is that 4 of 5 end up in closets or landfills when they are retired or die.

In fact, I'd bet it's at least that high.

This post makes me sad. The thought of all those Tivos...

[shudder]

Posted by: mishagray

I think the REAL reason that lifetime has not dropped for the second box:

Tivo doesn't have a good mechanism for tracking whether a box is being used on a single account or not.

For example: I buy a second lifetime for $150. Later on I give this tivo to my brother-in-law. Does my brother in law have to pay $149 more to turn it on? What if he never calls up, does the box just keep working even though I moved it to his house?

I think that the current "account enforcement" may not include the possibility of a lower priced "second" lifetime membership. They could eventually add this, but my guess is that Tivo would rather not do so.

It doesn't seem that current boxes require them to be hooked up to the internet, so the only enforcement is via the phone line. Since they use a national dialup service, then they don't get ANI/caller id authorization. They have little ability to enforce that all boxes are physically in the same house, beyond maybe requiring that all boxes on the same account "share" the same channel lineup. (or at least the same zip code setting).

Currently I have 2 SA Tivos on my account. Both have lifetime. One is in my basement. The other is at my brother's house 60 miles away.

For father's day should I get my dad a tivo (who lives 250 miles away), should I just get a second tivo for my "house"?

Posted by: MediaLivingRoom

quote:
Originally posted by mishagray
I think the REAL reason that lifetime has not dropped for the second box:

Tivo doesn't have a good mechanism for tracking whether a box is being used on a single account or not.

For example: I buy a second lifetime for $150. Later on I give this tivo to my brother-in-law. Does my brother in law have to pay $149 more to turn it on? What if he never calls up, does the box just keep working even though I moved it to his house?

I think that the current "account enforcement" may not include the possibility of a lower priced "second" lifetime membership. They could eventually add this, but my guess is that Tivo would rather not do so.

It doesn't seem that current boxes require them to be hooked up to the internet, so the only enforcement is via the phone line. Since they use a national dialup service, then they don't get ANI/caller id authorization. They have little ability to enforce that all boxes are physically in the same house, beyond maybe requiring that all boxes on the same account "share" the same channel lineup. (or at least the same zip code setting).

Currently I have 2 SA Tivos on my account. Both have lifetime. One is in my basement. The other is at my brother's house 60 miles away.

For father's day should I get my dad a tivo (who lives 250 miles away), should I just get a second tivo for my "house"?

What should we do then?

Posted by: dgh

quote:
Originally posted by rogo
My guess is that 4 of 5 end up in closets or landfills when they are retired or die.

quote:
Originally posted by mishagray
This post makes me sad. The thought of all those Tivos...

Yeah! Come one people! Don't throw your TiVos away! Send them to me! Of course if people just throw stuff away then the question of which is cheaper seems moot. Buying stuff to throw away is not efficient. So if you decide to put your TiVo in the landfill or closet, please send it to me instead. Or, save time and energy and just send the money to me when you're thinking of buying a new TiVo. :D

Of course lifetime may still be cheaper on these thrown-away TiVos but if you're going to toss them anyway, you're probably not thinking about that.

Posted by: HTH

My sister has a standalone with a dead hard drive and a combo that died in a lightning strike she's replacing from a store rather than do a repair exchange. I'm trying to convince her to let me fix the standalone and try to repair the combo, or at least salvage what I can.

Posted by: smak

My opinion on the multi discount is that it matches and excedes cable PVR pricing, and is a main reason for the decrease (besides the fact that it seems like the fair thing to do)

And now the 40 hour can be gotten for $129.

So, for cable users instead of

1. I didn't know about Tivo so I bought the cable PVR

or

2. I knew about Tivo, but the cable PVR was a lot cheaper

you are almost wiping out the 2nd excuse.

-smak-

Posted by: dmdeane

quote:
Originally posted by mishagray
This post makes me sad. The thought of all those Tivos...

[shudder]

Time to form the SPCT (Society for the Prevention of Cruelty to TiVos).

Posted by: ADGrant

quote:
Originally posted by smak
My opinion on the multi discount is that it matches and excedes cable PVR pricing, and is a main reason for the decrease (besides the fact that it seems like the fair thing to do)

And now the 40 hour can be gotten for $129.

So, for cable users instead of

1. I didn't know about Tivo so I bought the cable PVR

or

2. I knew about Tivo, but the cable PVR was a lot cheaper

you are almost wiping out the 2nd excuse.

-smak-

So you still have the first "excuse". I have a few more "excuses".

3. One box solution. No IR blaster required.

4. Two tuners in some of the Cable DVRs.

5. Better video quality and Dolby Digital for digital cable channels (no extra analog/digital conversions or recompression of the picture.

6. Try recording High Definition cable with a Tivo. HD Cable PVRs are starting to be rolled out to customers (not on my system yet unfortunately). There is hint of a HD Cable Ready Tivo (yes I am aware of the DirectTV unit, I don't want DirectTV).

I have had one of the orignal Tivos with a lifetime sub since early 1999. However, I will be at the front of the line for a High Definition Cable DVR when my cable system makes them available.

Posted by: Chris Gerhard

quote:
Originally posted by pbanders
Where do you guys have your money, stuffed into matresses?

Very crude calc: I put $300 into a good blue-chip stock, my return is about 8% BT yearly. I get a return of about $24 a year, I hold it so that I get LT CG's so my overall (state/fed) tax rate is about 20%, leaving me with $19.20. A year of Tivo service on the 2nd unit costs me $83.40, so with the $19.20 I make from the stock, the actual cost to me per year is $64.20 (or $5.35 / month) meaning payback will actually take even longer, 300/5.35 = 56 months, or about 4 years 8 months. I'm CERTAIN I'll be upgrading my Tivo long before then.

It's a good deal.

You also need to factor in a value for the lifetime when you are ready to sell the TiVo. Today it is my opinion that it is still better to buy lifetime even for the second TiVo but pretty soon these analog tuner PVRs are not going to be worth much with or without lifetime. My guess is buy lifetime today but don't buy lifetime a year from today because in 3 or 4 or 5 years, analog tuner PVRs will not be worth much at all. I don't have a crystal ball and can't tell you when almost everybody will be receiving digital OTA, digital cable or digital satellite but it can be measured in years and not decades. Believe me that everybody will want digital tuners in their PVRs before too many years but if you buy today and sell in 2 years, you will be better off by having purchased a lifetime subscription in my opinion.

Chris

Posted by: rasheed

It seems the analysis was done so that people would choose monthly over lifetime on secondary TiVos.

What is most interesting is that S1 lifetime owners who add S2 boxes pay the 6.95 (afaik) rate also. You would still need two S2 boxes though to fully utilize the HMF.

Rasheed