TiVo Q4 loss narrows on lower marketing costs
Results improve on fewer promotions
By Danny King -- Video Business, 3/5/2008
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MARCH 5 | TiVo’s fiscal fourth-quarter loss narrowed by 67% as hardware costs were cut in half from a year earlier, when the company gave away standard-definition digital-video recorders as part of a holiday promotion.
TiVo’s net loss for the three months ended Jan. 31 narrowed to $6.36 million, or 6¢ a share, from $19.5 million, or 20¢, a year earlier, the company said today. The loss also was narrower than TiVo’s November forecast of a $9 million to $12 million deficit for the quarter.
The company cut costs by reducing marketing expenditures. Hardware costs also fell as TiVo focused on selling its $299 high-definition DVRs during the holiday season. A year earlier, the company promoted its service with the free standard-definition DVR give-aways.
“Our main offering is the high-def box, and we plan to maintain our more limited spend on marketing,” CEO Tom Rogers said on a conference call with analysts this afternoon. “That’s a significant improvement over the previous year’s quarter, when we gave away boxes for free.”
Revenue fell 3.6% to $74.1 million. For the fourth quarter, TiVo was expected to lose 11¢ a share on $59.3 million in sales, according to the average estimates in a Thomson Financial survey.
TiVo had 3.95 million subscribers, down 11% from a year earlier, as U.S. satellite-TV leader DirecTV stopped including TiVo DVRs with its new subscriptions after discontinuing its licensing deal. TiVo-owned subscriptions were about flat at 1.75 million, the company said.
Rogers said the company will try to work with electronics retailers to boost subscriptions by bundling services with the sale of HDTVs.
“We didn’t fully tie ourselves into that trend as much as I’d like to have seen,” Rogers said.
For the full fiscal year, TiVo’s net loss narrowed to $37.5 million from $47.8 million, as revenue rose 5.3% to $272.7 million. Excluding items such as amortization and stock-based compensation, the company almost broke even last year, making it “the best year in our history,” Rogers said today.
The company expects a first-quarter loss of between $1 million and $3 million.
