TiVo 2009 Annual Report Download - page 15

Download and view the complete annual report

Please find page 15 of the 2009 TiVo annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 159

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159

Table of Contents
Competition in the TiVo-Owned Subscription Business. Our retail products compete against services sold directly by cable, telecommunications, and
satellite operators including Dish (formerly "EchoStar"), DIRECTV, Comcast, Time Warner, Verizon, and AT&T. These products typically combine
television reception with DVR functionality; most of these products include multiple tuners, high definition recording, and in some cases multi-room viewing
capability. Some of these products are offered at lower prices but in many cases are bundled with other services provided by the operator and the price for the
DVR and DVR service may not be apparent to the consumer. In addition, these products are usually professionally installed and may appeal to consumers
who do not proactively select a DVR service. Additionally, some U.S. cable operators are currently deploying server-based Video on Demand ("VOD")
technology, which over time could serve as a substitute to our retail products. We are aware of at least one U.S. cable operator, Cablevision, Inc., which has
announced plans to deploy server-based DVR products. To the extent that cable operators offer regular television programming as part of their server-based
VOD offerings and DVR technology, consumers may prefer not to acquire an independent set-top based DVR through retail channels.
Our retail products also compete against products with DVR functionality and internet-enabled services offered by consumer electronics companies
including:
• Standalone DVR: Some consumer electronics companies, including Panasonic and Sony, also produce DVD recorders with hard drives.
• Personal computers: Microsoft based PCs and Apple products (among others) enable a variety of entertainment features and services which offer
alternatives to traditional DVR services, primarily via internet delivery of content.
• Broadband Capable Devices and game consoles: We are seeing a proliferation of broadband enabled devices, such as connected televisions,
"smartphones", single purpose broadband set-top boxes and gaming consoles that offer broadband delivered content. Though these devices do not
offer the breadth of the TiVo service, they do compete for consumer purchases. In addition, many consumer electronics companies have
television or DVD products that are internet enabled, allowing them to access content and applications from various sources. In the future,
companies such as Sony and Microsoft could incorporate DVR technology into their video game consoles, and Microsoft has now enabled the
digital delivery of video programming over the internet to its game console.
Competition in our MSO/Broadcaster business. Our MSO/Broadcaster revenues depend upon both our ability to successfully negotiate agreements
with our consumer electronics and service provider customers and, in turn, upon our customers' successful commercialization of their underlying products.
We face competition from companies such as Microsoft, OpenTV (a unit of Kudelski), NDS, Motorola, Cisco, and Rovi, which have created competing
products that provide middleware and application software for use on television set-top boxes and consumer electronic devices. Such companies may offer
more economically attractive agreements to service providers and consumer electronics manufacturers. We also face competition from internal development
initiatives at some large service providers and consumer electronics manufacturers who may choose to develop similar products on their own rather than resell
products/services developed by TiVo.
Competition in the Media Services business. Digital video recorder services, in general, and TiVo, specifically, compete with other advertising media
such as print, radio, television, Video on Demand, internet, and other emerging advertising platforms for a share of advertisers' total advertising budgets. If
advertisers do not perceive digital video recording services, in general, and TiVo specifically, as an effective advertising medium, they may be reluctant to
advertise on the TiVo service. In addition, advertisers may not support or embrace the TiVo technology due to a belief that our technology's ability to fast-
forward through commercials will reduce the effectiveness of general television advertising.
11