13 March 2006

TiVo kills lifetime subscription model

It is clear that the future of DVR is bright.
Given this, TiVo has now take a new direction which is nothing but BAD NEWS for users.
TiVo is now effectively killing the "Lifetime Subscription" model under the guise of user not having to pay for hardware.  The article is located here: 
Why is this a bad thing?
Let’s look at the math…
You could have bought the 80 hour TiVo with a lifetime subscription for around $300.00.
You can buy an 80 hour TiVo with no subscription for around $150.00.
Under the new model, the same model can be on either a 1, 2 or 3 year deal.
If you already own a TiVo, your subscription cost is $12.95/month.
Under the 3 year deal, you don’t pay for the TiVo and only pay $16.95/month for the subscription.
Under the 2 year deal you pay $18.95/month and the 1 year deal $19.95/month.
The 3 and 2 year deals both result in a "hardware" cost (new subscription cost - old subscription cost) over the life of the contract of $144.00.  The 1 year deal has a hardware cost of $84.00.
So, it’s clear that TiVo gets their money back for the hardware no matter what.
Additionally they get their subscription fees for the period.
Now what happens after 3 years?
Humans are creatures of habit.  Furthermore, humans hate change.  So, after 3 years of using TiVo, what makes you think these users will switch to ReplayTV, a Cable or Satelite DVR or even more appropriately, a Media Center PC?
Just ask anyone who’s tried convincing their wives to switch over to a Media Center PC from TiVo.  Talk about Mission Impossible!
And that’s exactly what TiVo is counting on.
Media Center is growing exponentially and TiVo is making the move to grab as many subscribers now before Media Center works out the kinks and becomes more user friendly and the masses realize that you don’t have to pay a subscription for Media Center.
The sad thing is that after 3 years, compared to a lifetime subscription model, TiVo is making pure profit and the end user is simply loosing all the way.
There aren’t many TiVo’s left with lifetime subscriptions and I prefer ReplayTV myself anyway, but if you absolutely have to have a TiVo, make sure you get the lifetime subscription model.

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