TiVo 2004 Annual Report Download - page 5

Table of Contents
Index to Financial Statements
actor, director, channel, or time of showing. Consumers can also pause, rewind, and fast-forward live and recorded television. Unlike with a VCR, consumers
can playback a show from its beginning while it is in the middle of being recorded, and consumers can play back a previously recorded show while recording
another show.
Advanced Home Media Features Extend the TiVo Service Beyond DVR. The TiVo service also offers home entertainment innovations that extend
beyond DVR, with features like digital music and photos, multi-room viewing, and mobility. Customers with a TiVo Series2 DVR connected to their home
network can organize and play their digital music collection through their home entertainment system, or view digital photos on their TV. Those with two or
more TiVo® Series2 DVRs and a home network can use the multi-room viewing feature to record a show in one room and play it back in another room. The
TiVoToGo feature offers the ability to transfer recorded programs from a TiVo DVR to a computer. These advanced features are unique to TiVo and help to
further differentiate the TiVo service against competitive DVR offerings.
Technology Platform Capable of Integration. Our technology is designed for use both in TiVo-only DVRs and in integrated devices, including set-top
boxes, DVD recorders, and televisions. This allows us to offer consumer electronics manufacturers and television distributors a branded, highly respected
DVR service that they can in turn offer to their customers.
Advanced Solutions for Advertising and Promotion. We distribute video content designed to entertain consumers while providing a promotional
vehicle for our advertising and promotion customers. For example, movie studios pay us to deliver previews of upcoming films, consumer product companies
pay us to market their products, and television networks pay us to promote upcoming programs. In the future, content providers could use the TiVo service to
offer consumers special programming and pay-per-view packages such as movies, sporting events, and television shows.
Our Strategy
Our goal is to generate recurring revenues through the deployment of our branded entertainment services and technology to television viewing
households worldwide. The key elements of our strategy are:
Offer an Increasingly Valuable Service. Our goal is to lead the market with innovations that expand the value and potential of TiVo's subscription
service. We plan to continue to invest in innovation to improve consumer choice, convenience, and control over their home entertainment and to make TiVo
more compelling for both current and potential customers. For example, in January 2005 we began delivery of a new service release called "TiVoToGo". This
feature enables certain users to move their favorite programs stored on a TiVo-enabled DVR to a laptop for viewing on the road, or to any PC. Additionally,
we announced an evolution of our service strategy to create a product and service platform that will enable consumers to find and control content from any
broadcast or broadband source. We believe that the combination of mobility, entertainment personalization, and broadcast/broadband integration will continue
to enhance the TiVo service.
Increase Average Revenue Per User. As our subscription base has grown, we have been able to offer new advertising and audience measurement
research capabilities to programmers and advertisers to help them reach our subscription base. We plan to continue developing and enhancing these offerings,
which take advantage of the unique tagging, recording, storage, and viewing capabilities of the TiVo service. For example, we have recently completed
promotional and audience measurement research work for General Motors, IRI, Nielsen Media Research, Nissan Motor Corp., Universal Pictures, and Warner
Brothers.
Integrate Our Technology to Accelerate Platform Deployment. Our strategy focuses on creating, developing, and deploying DVR standards in order to
promote mass deployment of devices capable of running the TiVo service. We work with leading television distributors and consumer electronics
manufacturers to introduce products that incorporate our technology, including set-top boxes, DVD recorders, and televisions. Consumers are able to choose
from over a dozen TiVo-enabled products from industry leaders including Pioneer, Toshiba, DIRECTV, and Humax. In addition, we recently announced a
new deal to develop technology to integrate the TiVo service with DVRs deployed by Comcast.
Extend and Protect Our Intellectual Property. The convenience, control, and ease of use experience of the TiVo service is derived largely from the
technology we have developed. We intend to continue to design, develop, and implement innovative technological solutions that leverage and enhance the
TiVo service offering. We have adopted a proactive patent and trademark strategy designed to protect and extend our technology and intellectual property.
Promote and Leverage the TiVo Brand. We believe the strength of the TiVo brand is an advantage in attracting subscribers, consumer electronics
manufacturers, advertisers, and other customers. In the past, we have dedicated substantial resources to promoting our brand through multiple advertising and
marketing channels, participation in trade shows, sponsoring events, merchandising, and by leveraging strategic relationships. We believe the TiVo brand is
strongly established within the DVR category.
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