UC MBA, MKTG 711

1. : BEYOND DVR
Benoit Jasmin
Yiwen Stratton
Steve Toerner
Unitas (Group Jim Wolff

2. Agenda
Overview

Background

Alternatives

Recommendations

Target Markets

Marketing Strategies

Financials

Review


3. Background: SWOT Analysis
Strengths

 Software Development
 Intellectual Property
 Cable/ Satellite Distribution
Weaknesses

 Consumer Electronics
Opportunities

 Audience Research
 Advertising Solutions
 International Business
Threats

 MSOs can provide DVR equipment at cheaper prices

4. Core Competence
Cutting-edge software technology and

innovative research and development

5. Alternatives
Maintain current operations

Emphasize direct consumer electronic sales

Expand into international markets

Focus on mass distribution of software

Develop audience research & measurement

Promote DVR-based advertising

Redirect budgeted R&D money to marketing


6. Recommendations: 2 Year
Horizon
Drop stand-alone DVR sales

Focus on mass distribution of software

Develop audience research & measurement

(ARM)
Promote DVR-based advertising


7. Target Customers
Multiple Service Organizations (MSO)

Networks & Advertisers


8. MSOs: Market Share
Comcast
Other
22%
33%
Time-Warner
12%
Cox
DirecTV
6%
Charter
15%
TiVo 5%
4%
Cablevision
3%

9. MSOs: Target Customers
TiVo-client 35%
Target 17%
Other 48% Comcast
Other
22%
33%
Time-Warner
12%
DirecTV
15%
TiVo Cox
4% 6%
Charter
Cablevision
5%
3%

10. Value Proposition: MSOs
Provide customers with highest rated User

Interface (UI)
Reduce customer churn

Provide competitive edge


11. Rationale: Mass Distribution
No subscriber acquisition costs (SAC)

Take advantage of massive existing

distribution channels of MSOs
Capitalizing on our core competence

Reduce manufacturing costs


12. Marketing Strategy: Mass
Distribution
Cross-functional team with sales and R&D to

develop product packages (complete by month
1)
Strengthen relationships with

Comcast, Cox, Cablevision (begin upon
completion of product packages)
Develop relationships with Time Warner

Cable and Charter (begin in month 6)

13. Advertising and Audience
Research
Targets: Network & Advertisers

Prime Prospects: Current Clients

 BestBuy, Disney, NBC, Target, E*Trade, General
Motors, Novartis, BMW, Lexus, Sprite, Kraft
Foods, Lending Tree, Sony Pictures, Burger
King, General Motors, Weather
Channel, McDonalds, Nissan, Visa
Possible Additional Targets

 ABC, CBS, Fox
 Open Door Policy: The sky is the limit

14. Value Proposition: Network &
Advertisers
Provide more advanced and interactive ads

 Provide alternate means of advertising
 Ability to measure commercial viewership
Provide more extensive consumer research

 Viewer sample of 20,000 vs. 10,000 (Nielsen)
 Second-second analysis vs. minute-minute
 Capable of capturing DVR viewers
 TiVo subscribers are hard to reach, young, and
affluent

15. Rationale: DVR-based
Advertising
Low competition

Minimal capital investment required

High margin potential

Offer innovative advertising solutions


16. Marketing Strategy: Advertising
Increase ad-sales staff (begin in month

1)
Promote TiVo-based advertising platform

(begin in month 1)
Create cross-functional teams with

audience research staff to determine
potential advertising clients (begin upon
completion of research template)

17. Rationale: Audience Research
Strong brand recognition lends credibility to

audience research capabilities
Huge existing database requiring no further

capital expenditures
More extensive and efficient utility than

Nielsen’s service
$900+ million market


18. Marketing Strategy: Audience
Research
Create cross-functional teams with advertising staff

to standardize report template (complete by month
2)
Promote through current MSO partners (begin upon

completion of template)
Expand to other networks and advertisers

(begin in month 6)
Cross-promote with advertising


19. Pricing Strategy
Subscription Pricing

Service Charge: $13 – 16 per month for
 MSO
consumer
 TiVo nets approximately $1 per subscriber
Advertising Pricing – variable based upon

client need and means
Audience Research Pricing – variable

pricing depending on Nielsen service rates

20. 2008 Forecasted Income
Statement
Projection Worst Case Most Likely Best Case
PROJ.
REVENUES
TiVo Service $158,360,294 $158,360,294 $158,360,294
DirecTV $27,072,355 $27,072,355 $27,072,355
New MSOs $14,070,000 $22,110,000 $36,180,000
Audience Res. $18,000,000 $67,500,000 $90,000,000
Advertising $27,500,000 $30,800,000 $34,000,000
TOTAL REVS. $245,002,650 $305,792,650 $345,612,650
PROJ. $167,955,000 $167,955,000 $167,955,000
EXPENSES
NET INCOME $77,047,650 $137,837,650 $177,657,650

21. 2009 Forecasted Income
Statement
Projection Worst Case Most Likely Best Case
PROJ.
REVENUES
TiVo Service $139,357,059 $139,357,059 $139,357,059
DirecTV $23,823,673 $23,823,673 $23,823,673
New MSOs $21,966,000 $40,548,000 $62,514,000
Audience Res. $36,000,000 $168,750,000 $270,000,000
Advertising $30,250,000 $37,822,500 $46,240,000
TOTAL REVS. $251,396,732 $410,301,232 $541,934,732
PROJ. $172,993,650 $172,993,650 $172,993,650
EXPENSES
NET INCOME $78,403,082 $237,307,582 $368,941,082

22. Review
Continue service of current TiVo subscribers

Halt production of TiVo stand-alone DVRs

Focus on development of ARM, and ARM’s

“reach” to networks and advertisers (extremely
lucrative ROI potential)
Pursue new mass distribution partnerships

with cable distributors
Redirect R&D funding to software, ARM,

and advertising innovations

23. Long-Term Horizon
Initiate mass distribution partnerships with

satellite and small cable distributors
Investigate international market viability


24. Questions?
Thank You!