TiVo 2008 Annual Report Download - page 44

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Table of Contents
Fiscal Year Ended January 31,
(Subscriptions in thousands) 2009 2008 2007
TiVo-Owned Subscription Gross Additions: 187 276 429
Subscription Net Additions/(Losses):
TiVo-Owned (91) 19 235
MSOs/Broadcasters (520) (518) (155)
Total Subscription Net Additions/(Losses) (611) (499) 80
Cumulative Subscriptions:
TiVo-Owned 1,654 1,745 1,726
MSOs/Broadcasters 1,681 2,201 2,718
Total Cumulative Subscriptions 3,335 3,946 4,444
Fully Amortized Active Lifetime Subscriptions 225 175 165
% of TiVo-Owned Cumulative 59% 61% 58%
Subscriptions paying recurring fees
We define a "subscription" as a contract referencing a TiVo-enabled DVR for which (i) a consumer has committed to pay for the TiVo service and
(ii) service is not canceled. We count product lifetime subscriptions in our subscription base until both of the following conditions are met: (i) the period we
use to recognize product lifetime subscription revenues ends; and (ii) the related DVR has not made contact to the TiVo service within the prior six month
period. Product lifetime subscriptions past this period which have not called into the TiVo service for six months are not counted in this total. Effective
November 1, 2008, we extended the period we use to recognize product lifetime subscription revenues from 54 months to 60 months for all product lifetime
subscriptions acquired on or before October 31, 2007. We now amortize all product lifetime subscriptions over a 60 month period. We are not aware of any
uniform standards for defining subscriptions and caution that our presentation may not be consistent with that of other companies. Additionally, the
subscription fees that some of our MSOs/Broadcasters pay us may be based upon a specific contractual definition of a subscriber or subscription which may
not be consistent with how we define a subscription for our reporting purposes.
TiVo-Owned subscription net losses were 91,000 subscriptions decreasing the TiVo-Owned installed subscription base to approximately 1.7 million
subscriptions for the fiscal year ended January 31, 2009 as compared to the fiscal year ended January 31, 2008. We believe the decrease in total TiVo-Owned
subscriptions was largely due to the continued decrease in subscription gross additions because of increased competition from DVRs distributed by cable and
satellite providers. As a result of this competition and current economic conditions and our efforts to manage our subscriber acquisition costs, we are cautious
about our sales in the near term and may well experience further net losses in our TiVo-Owned subscription base. MSOs/Broadcasters installed subscription
base decreased by 520,000 subscriptions to 1.7 million subscriptions as of January 31, 2009 as compared to the same prior year period. This decrease is due to
DIRECTV's promotion of a competing DVR service and our other mass distribution deals being still in the early phases of development and/or deployment.
We have agreed to work with DIRECTV to develop a version of the TiVo service for DIRECTV's broadband-enabled HD DVR platform which we expect to
launch to consumers in calendar year 2010.
TiVo-Owned subscription net additions were 19,000 subscriptions slightly increasing the TiVo-Owned installed subscription base to 1.7 million
subscriptions for the fiscal year ended January 31, 2008 as compared to the fiscal year ended January 31, 2007. TiVo-Owned subscription net additions
decreased by 216,000, from 235,000 TiVo-Owned subscriptions net additions in the prior fiscal year period to 19,000 TiVo-Owned subscription net additions
in the fiscal year ended January 31, 2009. We believe this decrease was largely due to lower gross additions because of increased competition from DVRs
distributed by cable and satellite providers, including DIRECTV's non-TiVo products, as well as from a weaker economic environment and from an increase
in churn resulting from a larger subscription base.
As of January 31, 2009, approximately 225,000 product lifetime subscriptions had exceeded the period we use to recognize product lifetime
subscription revenues, but had made contact to the TiVo service within the prior six months. Such TiVo product lifetime subscriptions represent
approximately 34% of our cumulative lifetime subscriptions as
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