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>>> Concerns about mutliple DVR subscription pricing! <<<

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Beach is offline Old Post 04-10-2003 03:12 AM
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Exclamation Concerns about mutliple DVR subscription pricing!

The facts are if you are buying multiple DVRs in your house the second, third, etc. Should not cost the same for subscription.
I am ready to purchase a second DVR but TWO things are keeping me from doing it.
1- The fact that I have to pay the same price for a second subscription. The price of the first is very justified as the programming I download is of value and saves me a lot of time, there are account management costs, etc. Why should I pay the same fee for the programming information that is already in my home? Do I pay as much for a second phone line? Do 15 more channels of cable cost as much as the first 15?
The answer is NO. It is called economies of scale or add on sales. The first price reflects burden costs of setting up and managing the account, providing the data, etc. A piece of hardware should cost the same the second time as you need total redundancy. For a service there is a ton of redundancy. The only thing you are doing is providing the data twice.

So here is my #2!

2- If Tivo is not getting economies of scale and they "need the money" they will not be in business long. If I have purchased the home networking option why does my primary DVR not share the download to the second, third , etc.
The only argument for keeping the same price would be that it ties up the same amount of resources back to Tivo to get the programming. If so shame on Tivo! You can share MP3s from my computer, shows between DVRs but not your own programming?
I think the fact they are charging the same price is a sign that they need the cash, not a company that I want to sink more money in to.
This current pricing model makes little sense if you look objectively at it, it does raise concerns as a subcriber!

Beach

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Hunter Green is offline Old Post 04-10-2003 03:50 AM
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No one here knows if Tribune charges TiVo for guide data per household, per account, or per device, but my bets are on the latter. If it costs TiVo twice as much to put guide data on your two TiVos, it has to cost you twice as much, too. This might not be what you want to be true, but it may be true anyway. (And TiVo is not likely to be posting details of their contract with Tribune here, so it'll have to remain a mystery.)

Supposing Tribune does charge per household, not per device, that just means TiVo is distributing the cost one particular way instead of another. How keen would you be on the idea of the first TiVo costing you $16/month, and all subsequent ones only $10/month? That makes one-TiVo households pay more (and means make it harder for customers to get started on the TiVo Way), two-TiVo households break even, and three-or-more save money. And that probably makes the proposal approximately revenue-nuetral (and until TiVo turns its first profit, any plan that's not revenue-nuetral is not worth considering).

Or are you really saying "they should charge me less" and trying to disguise that as saying "they should change the distribution of fees" ("in a way that means they charge me less")?

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Beach is offline Old Post 04-10-2003 12:59 PM
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Economies of Scale

What I am saying is if they do not have a way to price second and third DVRs at a more competitive price they will not see profitable growth.

1- Poor contracts are meant to be re-written if they are really locked in at a per DVR price. Better to re-write a contract than lose one as the company goes out of business.

2- Economies of scale on subscriptions are there. If Tivo hasn't found them then shame on them. Account management, downloading once, billing, etc. Do the math it is not hard to see how several in one house under one name cost less than one per house. Even cost of sale should be factored in to the cost.

3- That aside, this same price model WILL NOT WORK in the market. Time will prove this out. So many reasons I shouldn't have to explain. Find an example in the market were a service deliverable costs the same for multiple purchases (especially when the deliverable could feasibly cost ZERO)

Again the only sane reason could be some existing contract, that said get the lawyers together and fix an obvious problem. Whoever they pay a roylaty would much rather get less on devices 2, 3 and 4 than get nothing at all.

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phone1 is offline Old Post 04-11-2003 12:37 AM
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Was it really necessary to start yet another thread about this when there's one on the identical topic started just yesterday and still on page one? Particularly one that is based on no facts, no knowledge of TiVo's business model and a seemingly vague concept of business in general? Hollow statements like "Do the math it is not hard to see how several in one house under one name cost less than one per house." (Figures please?) and "Economies of scale on subscriptions are there. If Tivo hasn't found them then shame on them." don't really carry much weight. (TiVo seems to be getting a lot of shame heaped on it in this thread.)

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Beach is offline Old Post 04-11-2003 08:13 PM
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Lightbulb Dear Phone

I do business Development for one of the best success stories in the Tech sector for 2002 and we will be again in 2003. I don't feel I need to spell out the obvious. This is a poor pricing model, one that will not make it long term, how do I know this? Show me where it exists in the market. It is so painfully obvious that a second subscription of bits and bytes should not cost as much as the first that you will not find many that will pay for it.
I don't want to do the thinking for Tivo but I do suggest they start thinking!
If you think the second subscription is of equal cost to Tivo I suggest you study up! Figures where given: Total redundancy:Account mgt, billing, downloading data. Better yet tell me what isn't redundant about a subscription! It isn't being vague, this model isn't rocket science!
Obviously you must be pretty close to them as you seem put out by my statements.
I want to see Tivo succeed, companies succeed through strong bottom line revenue. There is NO EASIER WAY to get bottom line revenue than by selling to your existing customer base! This pricing model will not bring that revenue in.
It doesn't take a lot of knowledge about Tivo to understand their model! The specifics to their contracts are not public knowledge but as stated before, contracts when they don't help you grow your business should be evaluated and re-written so they do. This happens every day. If they are paying a subcription per box (one of the only factors that would keep the 2, 3 etc. box price so high in a single house hold) the holder of that contract wants to maximixe their profit from that contract too.

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phone1 is offline Old Post 04-11-2003 08:58 PM
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Re: Dear Phone

quote:
Originally posted by Beach
If you think the second subscription is of equal cost to Tivo I suggest you study up! Figures where given: Total redundancy:Account mgt, billing, downloading data. Better yet tell me what isn't redundant about a subscription!
Sorry, I'm not the one who needs to "study up." (And I still don't see any figures, just a lot of broad, vague, statements.)There are NO economies of scale in servicing multiple SA TiVo units.

Each SA TiVo requires its own phone call/download, whether it's in the next room or across the street. Get it? Same exact cost to TiVo per event.

There are no significant savings from an accounting standpoint. In my case and for many others, both my SA TiVos have lifetime, so there's no billing at all. Even monthly subscribers have their credit cards automatically debited, an electronic transaction that cost a few pennies.

Account management? What is that exactly? Each unit is statistically just as likely as another to develop an anomaly that will result in a call to Customer Care. The fact that two calls come from the same household doesn't save TiVo any money.

Sure it's easier to sell to the customer base. But in this model the sales should be producing higher margins! A loyal (not to mention captive) base is willing to pay more. Where margins need to be thin is in the competitive marketplace where you are trying to attract new customers. I agree that if the savings were there, they should be passed along if TiVo can do so without negatively impacting its bottom line. But to hand out discounts arbitrarily without justification is fiscal suicide.

Shareholders have been known to sue the management of companies who acted in that fashion.

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Beach is offline Old Post 04-11-2003 09:41 PM
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Dear Engineer

Tivo unit #1 (Primary) downloads the program data via the net. Tivo unit #2, #3 get the program data from Tivo Unit #1 (no connection to Tivo).
Please tell me what units #2 and #3 cost Tivo for that download?
When I say download those are "vague terms" but I would assume we don't have to talk about every byte that gets passed for handshaking and establishing connection, downloading data, etc. BECAUSE it should not be necessary for the discussion.
So tell me in the model above what cost is #2 and #3 to Tivo?

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mmascari is offline Old Post 04-11-2003 10:51 PM
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Re: Dear Engineer

quote:
Originally posted by Beach
Tivo unit #1 (Primary) downloads the program data via the net. Tivo unit #2, #3 get the program data from Tivo Unit #1 (no connection to Tivo).
Please tell me what units #2 and #3 cost Tivo for that download?
When I say download those are "vague terms" but I would assume we don't have to talk about every byte that gets passed for handshaking and establishing connection, downloading data, etc. BECAUSE it should not be necessary for the discussion.
So tell me in the model above what cost is #2 and #3 to Tivo?



That sounds good, with just a few flaws. Until this week, units #2 and #3 didn't have any way to talk to unit #1. I don't mean, just no software for the communication, but no connection or knowledge at all. Version 4 of the software changes that picture some, but will take a month to roll out to the customer base. What we don't know, is if there is a feature that will let units #2 and #3 get the data they need from unit #1. All we know about the communication is that unit #1 can send a show to the other units. Now, 6 months (or some other arbitrary time frame) from now, this may change and then we could look for a change in price. Why would they announce a change now? As a suggestion, this makes sense. As a rant on why it costs too much to have more than 1 TiVo, it's just a rant like any other.

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Hunter Green is offline Old Post 04-11-2003 10:54 PM
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They still have all the costs that they always had, except one relatively small one: the cost of bandwidth and server usage. In particular, the two big ones: Tribune's contractual costs for the data (there's some info to suggest this is about 60% of the total cost-to-consumer), and customer support for the associated TiVo.

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Beach is offline Old Post 04-11-2003 11:06 PM
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Some call Rank others call a valuable heads up

Until this week??? How long have they been testing networking? Don't look in the rear view mirror look forward. The fact is they can share this data if they want. Could there be some technical issues, possibly but not anymore technical than the four features of the HMO, which by the way I purchased. This is not about $15 a month, this shows Tivos market acumen.
You can argue this all you want time will prove me right. My guess is Tivo will reduce multiple unit costs. If they don't multiple units will not be adopted enough to keep the feature. You do have to have enough subscribers of a feature to warrant supporting that feature.
I am sure there are some that love TV so much they will pay $30 - $45 a month for TV schedules but you are the exception both on price and TV addiction. It is a fine balance of someone that watches enough TV to warrant 2 or 3 Tivo's and still has enough disposable income to pay $30 - $45 a month to support that habit.

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phone1 is offline Old Post 04-11-2003 11:12 PM
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Re: Dear Engineer

quote:
Originally posted by Beach
Tivo unit #1 (Primary) downloads the program data via the net. Tivo unit #2, #3 get the program data from Tivo Unit #1 (no connection to Tivo).
Please tell me what units #2 and #3 cost Tivo for that download?
When I say download those are "vague terms" but I would assume we don't have to talk about every byte that gets passed for handshaking and establishing connection, downloading data, etc. BECAUSE it should not be necessary for the discussion.
So tell me in the model above what cost is #2 and #3 to Tivo?

There might be some point to this if it worked that way. But as has been pointed out it doesn't today. This was discussed in detail in the other thread about this. Next time, "study up" before beginning a rant.

As I stated, when TiVo can figure out how to cut costs, they'd be wise to pass them along. Unfortunately, I believe the LAN delivery of guide data to multiple TiVos has some real potential for fraud.

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Beach is offline Old Post 04-11-2003 11:46 PM
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Wink Rant?

Feedback that shows holes in Tivo's strategy = rant?
I hope that phone1 is not a Tivo employee, if you are it might explain why they have the pricing model they do.
Things work the way the do today because that is Tivo's chosen path.
This goes back to my economies of scale. They are there if they want to exploit them the fact they haven't speaks about their direction or acumen you take your pick.
It is not a technical issue, may be a contract but that should get fixed.
I don't expect a fix tomorrow but stating a very common sense view point as a customer may help them improve their model.
Time will prove this right, I guarantee it!

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Hunter Green is offline Old Post 04-11-2003 11:50 PM
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So did the last ten thousand armchair-CEOs to visit this forum.

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Beach is offline Old Post 04-11-2003 11:58 PM
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Talking You made this same point about DTivo

Phone 1:
I wish gas was 50 cents a gallon and a sixpack of beer was $1.00.

It's frustrating to hear people whine about price yet offer no real justification for a discount. Even at the current subscription price TiVo is struggling. The old "we'll sell more if we cut the price" marketing strategy has put more than one company out of business.

DTiVos get their TiVo guide data through the satellite feed and require very little maintenance otherwise. One sat. feed gets all the TiVos you own. The $4.99 "additional receiver" fee is just gravy for D*. (Note that it applies to any receiver, not just a DTiVo.)

Each SA requires the same daily call (dialup or broadband, doesn't matter) whether it's in your house or your neighbor's and requires individual server time while it's happening. Until TiVo can figure out how networked TiVos can share a single update, I doubt you'll see any price breaks, maybe not even then.

Just get over it.

>>>>>>>>>.
Telling customers to "get over" common sense holes should make things better.

Your own words:
"DTiVos get their TiVo guide data through the satellite feed and require very little maintenance otherwise. One sat. feed gets all the TiVos you own. The $4.99 "additional receiver" fee is just gravy for D*. (Note that it applies to any receiver, not just a DTiVo.) "
This is economies of scale we are talking about.

You act like their is some technology holding them back, it is their technology. They should fix it (if that is the issue).
If it is licensing than threads such as this go a long way in renegotiating a win\win\win agreement (Tivo\Tribune\Customer).

You asked for solutions they have been given, you have even given them.
In fact you have said that "anything they charge is GRAVY" for boxes 2 and beyond.

What gives? Are you just trying to get your 12.5 posts a day up to 14?

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phone1 is offline Old Post 04-12-2003 12:14 AM
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Sigh Some people don't seem to actually read other's posts before attacking them. You're talking apples to oranges comparing the SAs and DirecTiVos - they're not even operated by the same company.

I've avoided addressing you personally, but you seem determined to take it to that level. Do you know anything about TiVo? You certainly appear to be clueless.

OK move along, nothing to see here...

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mmascari is offline Old Post 04-12-2003 12:18 AM
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Re: Some call Rank others call a valuable heads up

quote:
Originally posted by Beach
Until this week??? How long have they been testing networking? Don't look in the rear view mirror look forward. The fact is they can share this data if they want. Could there be some technical issues, possibly but not anymore technical than the four features of the HMO, which by the way I purchased. This is not about $15 a month, this shows Tivos market acumen.
You can argue this all you want time will prove me right. My guess is Tivo will reduce multiple unit costs. If they don't multiple units will not be adopted enough to keep the feature. You do have to have enough subscribers of a feature to warrant supporting that feature.
I am sure there are some that love TV so much they will pay $30 - $45 a month for TV schedules but you are the exception both on price and TV addiction. It is a fine balance of someone that watches enough TV to warrant 2 or 3 Tivo's and still has enough disposable income to pay $30 - $45 a month to support that habit.



Until this week, yes. Until this week there was no installed base of TiVo's that had any networking features. Did they start development of the TiVo networking features this week, no. Did they tell us about the networking features as soon as they started development of them, no. Did they let the beta testers describe the features before the launch, no. So until this week, there was no way that a multiple TiVo price savings could be sold. Could they be working on this, yes. Do we know, no. And finally, do you think they would tell us ahead of time, no.

What would happen to the small number of users who would currently buy multiple units at the current price if they told us "3 months from now the price is going to drop". Is there an alternative choice for those users that is cheaper and requires announcing a new price before it is available to be sold to keep them from buying something else. Would they sell more additional TiVos if the additional cost was cheaper, probably, but until they can actually provide this, announcing it only has downsides.

Do I think they will do this at some point, yes. Would it cause me to buy another TiVo, maybe, but definitely favor TiVo over another alternative that was more expensive. For all we know, they have this is beta right now, but there are issues that are still being worked out. Either way, I wouldn't expect any company to ever pre-announce a price drop. Announcing a price hike makes sense, it leads to fence sitters making purchasing decisions. Announcing a price drop, just strands inventory in the supply chain.

So, knowing this, a suggestion to lower the price for multiple units in one house is a good suggestion. Complaining that they don't do it already or haven't announced it yet is a rant.

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Beach is offline Old Post 04-12-2003 01:03 AM
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Question Agreement and a Question

Mmascari,
I am in total agreement. Phone1 stated that I made no suggestions which I clearly did.
Part of bringing a solution to market is doing focus groups on pricing. Why would users pay the same price for a highly redundant services?
Did Tivo really do a focus group? I doubt it.
Again I bought HMO because the value for me was there. Ranting is not the intention, wanting Tivo to succeed in multiple DVRs per home is.


Phone1,
Totally different from a gear head perspective. Facts are it is data being shared from one machine to another (old, old, old technology) with all the caveats of security, replication, authentication, etc.
With 12 posts a day you obviously know a lot so here is the question for you.
What factors keep Tivo from seeing large redundancy savings with units 2,3, etc. in the same home using HMO?

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mmascari is offline Old Post 04-12-2003 01:47 AM
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I thought phone1 and I had the same opinion on this

Just to be clear of what that opinion is:
Reduced pricing for additional units cannot be done on today's production platform. There is very little economy of scale for additional units today. This may all change in the future. (Also duplicate threads are not a good thing.)

Now, since this is a suggestion forum: Reduced pricing for additional units is a great idea

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Beach is offline Old Post 04-12-2003 02:17 AM
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Smile Great I will get two replies then.

Mmascari and Phone1.
My question still stands.

What factors keep Tivo from seeing large redundancy savings with units 2,3, etc. in the same home using HMO?

I would like both your perspectives.

Beach

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Re: Some call Rank others call a valuable heads up

quote:
Originally posted by Beach
[I am sure there are some that love TV so much they will pay $30 - $45 a month for TV schedules but you are the exception both on price and TV addiction. It is a fine balance of someone that watches enough TV to warrant 2 or 3 TiVo's and still has enough disposable income to pay $30 - $45 a month to support that habit. [/B]



I definitely love TV and I pay monthly on 2 of my SA TiVo's. I would have another if but I just won't send more money on TV monthly. I know we will never get a multi unit discount on the first gen units, but I will not upgrade to Series 2 if they don't add the ability to get a discount if you have more than one unit on the same account that are connected to a LAN.

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