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Thursday, March 09, 2006
TiVo Announces New Pricing Structure

To attract more subscribers, TiVo is launching a new pricing plan next week that eliminates the upfront charge for its digital video recorders and sets bundled service packages based commitments of one to three years.

The new scheme was announced Wednesday along with its fiscal fourth-quarter report of narrower losses in line with Wall Street expectations.

Under the plan, subscribers will not have to pay for a DVR box, which currently costs about $50 after rebates. Instead, they will get a TiVo 80-hour Series2 box and pay $19.95 a month, or $224 prepaid, for a one-year service commitment; $18.95 a month, or $369 prepaid, for a two-year commitment; and $16.95 a month, or $469 prepaid, for a three-year commitment.

The new plan will be available initially only to customers who sign up through Customers attained through retail stores will still face the current prices and service fees, though TiVo is working to apply the same new pricing plan for retail customers.

TiVo's previous product-lifetime service subscription fee of $299 will be eliminated, the company said.

Though the new monthly charges would be higher than TiVo's current $13 monthly service fee, company officials said extensive market research showed customers favored the simplified scheme with zero costs upfront for the hardware.

The new plan should fuel new subscriptions, help reduce customer churn, and raise the net gain per subscription.

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