TiVo 2006 Annual Report Download - page 6

Table of Contents
content including pictures, videos, and movies. DVR technology also gives consumers the ability to easily fast forward, pause, and rewind recorded video
content which should result in increased demand for DVR technology. Today, approximately 16 million households have DVRs and this is expected to
increase to 56 million by 2010 according to The Carmel Group.
Television Distributors See DVR Technology as a Competitive Asset. Nearly all of the major television distributors in the United States including
Comcast, DIRECTV, EchoStar, Time-Warner Cable, and others, are offering DVR technology to their customers. These companies have indicated they
consider DVR technology a competitive tool to help differentiate their services by offering their customers more programming features. These operators are
looking for ways to more effectively attract and retain consumers to their own offerings.
DVR is Changing the Television Advertising Industry. The proliferation of DVRs, and their ability to easily fast forward through television content, is
requiring television advertisers to evaluate new and different ways to reach out to consumers. The DVR in general and the TiVo service specifically have
given viewers the freedom to view video content when they want to view the content. Time shifting has made it more difficult for advertisers to be guaranteed
that their commercials will be viewed by audiences at the regularly scheduled time the program is aired by network or local television stations. DVRs allow
viewers the freedom to fast forward through all or a portion of commercial advertising incorporated into television and other programs, which means that
advertisers are not assured that their commercials will be viewed at all. TiVo offers other programming options, such as video delivered by broadband, which
may result in further audience fragmentation.
Broadband Video is Increasing Television Viewing Options. The growth in broadband video is providing television consumers with significantly more
video options. These increased viewing options are providing television consumers with more access to different forms of video content from providers other
than traditional cable and satellite television program packages. We expect DVR technology to be integral in providing television consumers with the ability
to access, organize, and view television from both broadband and traditional television sources.
Our Solution
We have created a unique set of technologies, products, and services that meet the needs of consumers, television distributors, and the advertising
community.
Compelling, Easy-to-Use Consumer DVR Offering. The TiVo service, combined with a TiVo-enabled DVR, has many features that we believe
dramatically improve a consumer's television viewing experience. Depending on the model, TiVo-enabled DVRs can support analog cable, digital cable,
satellite, or over-the-air broadcast television, including high definition television. The TiVo service enables consumers to watch TV on their own schedule by
automatically finding and digitally recording their favorite shows, all season long, even if the schedule changes, and can even skip reruns. The TiVo service
allows consumers to find new shows to watch through features that enable them to search for shows to record by subject, title, genre, actor, director, or
channel. The TiVo service can also suggest shows consumers may like based on shows they are recording. Consumers can also pause and rewind live and
recorded television. Unlike with a VCR, consumers can play back 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.
Differentiated Features. The TiVo service also offers home entertainment innovations with features like digital music and photos, multi-room viewing,
mobility, and unique control over what television programming is viewable in the home. Customers with the TiVo service and a Series2 DVR or Series3 HD
DMR (High Definition, Digital Media Recorder) connected to their home network can play their digital music collection through their home entertainment
system, download premium content via broadband, 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 enables users to transfer programs
recorded on certain model TiVo DVRs to their own personal computer. Consumers can either watch the programming on their personal computer or transfer it
to various portable media devices. TiVo KidZone, gives parents improved ability to easily choose the best television
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