TiVo 2007 Annual Report Download - page 12

Table of Contents
The initial term of our agreement is for five years from completion of the TiVo service software solution, but no longer than seven years after the
effective date of the agreement. During the term of the agreement, we will provide Cox with certain customer support and maintenance services.
We will have the continuing right to sell certain types of advertising in connection with our service offered through Cox. We will also have a right to
sell certain types of advertising on other Cox DVR set-top boxes enabled with the advertising management system. As part of the agreement, Cox is receiving
a non-exclusive, non-transferable license to specific TiVo intellectual property to deploy the TiVo service software solution and advertising management
system, including certain trademark branding rights. Cox will also reimburse us for the cost of certain third-party license fees. In addition, Cox may be
entitled to certain most favored customer terms if we enter into future agreements with multi-channel video distributors whose commitment to deploy our
DVRs and advertising software is less than Cox's commitment. Cox has the right to terminate the agreement in the event we are the subject of certain change
of control transactions involving any of certain specified companies. Cox is in trials and we currently expect the TiVo service on Cox to launch in its initial
markets during the current fiscal year.
Sales and Marketing
Consumer Offerings. We sell subscriptions to the TiVo service directly to consumers who have purchased a TiVo-enabled DVR. We currently sell
TiVo service-only subscriptions either for a monthly subscription rate of $12.95 per month (with discounts available to subscribers who have multiple
subscriptions to the TiVo service), or a pre-pay option of $129 for one-year, $249 for two-years or $299 for three-years of TiVo service. We no longer offer
new product lifetime service subscriptions for general sale to the public; however, we do offer product lifetime service on a limited basis to our existing
subscription base. TiVo-enabled DVRs are available from major retailers across the United States, including Best Buy and Circuit City. To drive sales while
managing costs, we have shared marketing expenses with key retailers, and in some cases, we have offered to share a portion of the subscription revenues. We
currently manufacture and sell three models of TiVo-enabled DVRs, the 80-hour TiVo Series2 DT (Dual Tuner), the 200 hour TiVo HD DVR, and the TiVo
Series3 HD DVR which retail for $99 (inclusive of a $150 rebate), $299, and $599 (inclusive of a $200 rebate), respectively.
Services to Television Service Providers. We also sell our technology and services to television service providers, such as DIRECTV, Comcast, and
Cox who then market (or in the case Cox, plan to market in the future) the TiVo service to their subscribers.
Services to the Advertising Industry. We also sell advertising and audience research measurement services, through a dedicated team of salespeople
and through partnerships with third parties like IRI and NBCU.
Customer Service and Support
For our TiVo-Owned standalone DVRs, we provide customer support through outsourced service providers as well as our internal customer service
personnel. For our DIRECTV receivers with TiVo service, DIRECTV is primarily responsible for customer support. Comcast and, when launched, Cox are
primarily responsible for customer support for their subscribers to the TiVo service. We provide training and other assistance to Comcast and Cox.
Individual customers have access to an Internet-based repository for technical information and troubleshooting techniques. They also can obtain support
through other means such as the TiVo website, web forums, email, and telephone support.
We offer a manufacturer's warranty on our DVRs TiVo manufacturers which enable our TiVo-Owned subscriptions of 90 days for labor and one year
for parts. For our direct sales that include both a TiVo-Owned standalone DVR and a subscription to our service (other than product lifetime subscriptions),
we extend such manufacturer's warranty for parts only for the duration of the subscription which may last as long as three years. We contract with third parties
to handle warranty repair.
Research and Product Development
Our research and development efforts are focused on designing and developing the components necessary to enable the TiVo service. These activities
include both hardware and software development.
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