TiVo 2005 Annual Report Download - page 24

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Table of Contents
We rely on our retail customers and consumer electronics manufacturers to market and distribute our products and services. In addition to our own
efforts, our retail customers and consumer electronics manufacturers distribute DVRs that enable the TiVo service. We rely on their sales forces, marketing
budgets and brand images to promote and support DVRs and the TiVo service. We expect to continue to rely on our relationships with these companies to
promote and support DVRs and other devices that enable the TiVo service. The loss of one or more of these companies could require us to undertake more of
these activities on our own. As a result, we would spend significant resources to support the TiVo service and DVRs and other devices that enable the TiVo
service. The failure of one or more of these companies to provide anticipated marketing support will require us to divert more of our limited resources to
marketing the TiVo service. If we are unable to provide adequate marketing support for DVRs and the TiVo service, our ability to attract subscriptions to the
TiVo service will be limited.
If we are unable to create or maintain multiple revenue streams, we may not be able to cover our expenses and this could cause our revenues to
suffer.
Our long-term success depends on our ability to generate revenues from multiple revenue streams. Our long-term success will depend on securing
additional revenue streams such as:
• licensing;
• advertising;
• audience measurement research;
• revenues from programmers; and
• electronic commerce.
In order to derive substantial revenues from these activities, we will need to attract and retain a large and growing base of subscriptions to the TiVo
service. We also will need to work closely with television advertisers, cable and satellite network operators, electronic commerce companies, and consumer
electronics manufacturers to develop products and services in these areas. We may not be able to work effectively with these parties to develop products that
generate revenues that are sufficient to justify their costs. We also may be unable to work with, or to continue working with, these parties to distribute video
and collect and distribute data or other information to provide these product or services. In addition, we are currently obligated to share a portion of these
revenues with several of our strategic partners. Any inability to attract and retain a large and growing group of subscriptions or inability to attract new
strategic partners or maintain and extend our relationships with our current strategic partners could seriously harm our ability to support new services and
develop new revenue streams.
We face risks in connection with our licensing and marketing agreement with Comcast for the development of a TiVo-branded DVR software
solution and advertising management system for deployment to Comcast customers.
We may never develop the purchased TiVo-branded DVR software solution and/or advertising management system. Pursuant to our agreement with
Comcast, development and deployment of the TiVo service software solution is targeted to occur within two years from March 15, 2005. Development and
deployment of the TiVo advertising management system is targeted to begin after the second anniversary of this agreement, but by no later than February 15,
2008. We could be subject to certain consequences, including, but not limited to, termination of the agreement in the event development of the TiVo service
software solution and the TiVo advertising management system have not been completed by the relevant deadlines. Our ability to develop and enable
deployment by Comcast of the TiVo service software solution and advertising management system by the relevant deadlines could be delayed or prevented by
technological problems or a lack of available resources to meet our obligations under the agreement. In the event we fail to deliver either the TiVo service
software solution and/or advertising management system to Comcast by the relevant deadlines, our agreement with Comcast could be terminated and our
business could be harmed.
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