Alright we weren’t right about the money for nothing bit, but TiVo might just be free in the land down under after all. Reports from Australia say that TiVo would be offering it’s DVR without monthly subscription fees in that country. In league with Aussie media giant Seven Media Group, the service is in line to be out over the summer. TiVo is to earn money through licensing revenue rather than monthly membership fees.
The move is definitely revolutionary and in this highly competitive market, TiVo needs the boost a “free” tag gives, given that it does not enjoy first mover advantage. If this strategy is rolled out in America, it will probably be the rage. I doubt TiVo is likely to roll out this offer in America though. The reasons are purely monetary. Why would TiVo give up a fat subscription fee, specially when it’s rivals are still charging customers.
In the US the TiVo subscriber base has not grown too much, lately. Although TiVo has been victorious in the courtroom and won licensing battles, customers still have to give TiVo the commercial boost it needs. However, this is my take on how it could work. If TiVo’s customer base grows, fixed costs get spread over a larger customer base. In addition TiVo partners and advertisers would pay more for a greater viewership.
There are some issues with this model. A model that depends largely on advertisements would not be liked by TiVo partners like Comcast. Lifetime subscribers are another issue. The Australian TV arena is interesting nonethless. The players are XM, Sirius, Netflix and Napster. With TiVo, the new player in the ring the battle would make for good corporate drama.
