MAY 17, 2004 INFORMATION TECHNOLOGY Will Souping Up TiVo Save It? Why investors, spooked by the competition, may be fleeing its stock too soon Michael Ramsay, chief executive of TiVo Inc., has heard the eulogies for his pioneering company many times before. Yes, digital video recorders, which let viewers pause live TV, zip through commercials, and automatically record their favorite programs, are suddenly hot. And yes, TiVo's name has become virtually synonymous with the technology. But the five-year-old company faces an onslaught of competition, and its strategic position seems hopeless. Most of its customers buy stand-alone boxes, then pay $12.95 a month for TiVo's "time-shifting" service. Now, cable companies are beginning to offer similar services for lower subscription rates with no up-front cost. Worse, Rupert Murdoch's DirecTV, TiVo's biggest customer, is considering using technology from another Murdoch company to replace TiVo in at least some of its satellite boxes. Investors certainly are spooked. TiVo's stock is down 50% since last July, to less than $7. "People are assuming the worst," says analyst David Farina of investment bank William Blair & Co. But tap that pause button for a moment. A close look at Ramsay's new plans for the company suggests that any requiem for TiVo may be premature. He's pushing to make TiVo less dependent on stand-alone boxes by striking alliances to have TiVo's software incorporated into hot-selling consumer electronics such as DVD recorders. He's aiming to get more revenue from subscribers by offering them cool new features, including satellite radio, digital photo editing, and the ability to surf the Web from TiVo boxes. And although many of his customers get TiVo to avoid advertising, he expects to build a significant business from selling opt-in ads specially crafted for his much-coveted audience. "TiVo has a lot of irons in the fire. I wouldn't write them off just yet," says analyst Michael Paxton of researcher In-Stat/MDR. ... http://businessweek.com/magazine/content/04_20/b3883087_mz063.htm ---------------------------------------------------------------------- You can UNSUBSCRIBE from the OpenDTV list in two ways: - Using the UNSUBSCRIBE command in your user configuration settings at FreeLists.org - By sending a message to: opendtv-request@xxxxxxxxxxxxx with the word unsubscribe in the subject line.