Today TiVo announced their quarterly numbers. There was a quarterly loss, but most analysts are focusing in on the subscriber numbers, and this past quarter the company added 264,000 subscribers, a great number considering last year at this time the company only had around 700,000 subs after 4 years!
While many analysts are looking at revenue or subscriber growth, I think the key number to focus on is the percentage of subscribers coming from DirecTV, and not for the obvious reasons. During the holiday quarter 200,000 of 330,000 new subscribers came from the DirecTV, roughly 60%. This quarter 196,000 of 264,000 subscribers came from DirecTV, roughly 74%. Many analysts simply will point to this trend and state that TiVo is too dependent on DirecTV for subs and miss out on possibly a much larger problem. TiVo is in the midst of transforming its product from a simple DVR to a product capable of managing digital media around the home. With DirecTV now controlling 900,000 of the 1.6 Million (roughly 56% and climbing) the company will have a hard time offering advanced services to more than half of their installed base.
Bottom line: When you can't offer the advanced services that your company's future depends on to 3 out of every 4 new subscribers, you have a serious problem.
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