TiVo 2009 Annual Report Download - page 24

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Table of Contents
A significant part of our installed subscription base results from our relationship with DIRECTV which we expect to continue to decrease in
the future due to DIRECTV's on-going support of competing DVRs.
Although we are working with DIRECTV to develop a new high-definition DVR with TiVo for DIRECTV for launch in the future, DIRECTV does not
currently have the right to manufacture and distribute TiVo DVRs to DIRECTV subscribers. As a result of this and DIRECTV's support of a competing DVR
we expect the number of our DIRECTV with TiVo subscriptions to continue to decrease in the future. As a consequence of the loss of these future revenues
from these DIRECTV subscribers with TiVo service subscriptions, our business may be harmed.
We face risks in connection with our amended development and services agreements with DIRECTV for the development and deployment of a
new HD DIRECTV DVR featuring the TiVo service.
Under the terms of our non-exclusive arrangement, we are working with DIRECTV and its suppliers to develop a version of the TiVo service for
DIRECTV's broadband-enabled HD DVR platform to deliver the new HD DIRECTV DVR with TiVo Service to DIRECTV for a launch to consumers later
this year. We may face significant technological, third-party supplier and other challenges in our development of the TiVo service for DIRECTV's broadband-
enabled HD DVR platform, any of which could delay or prevent us from delivering the new product. If we are unable to successfully develop this new
broadband-enabled HD DVR with TiVo service for deployment by DIRECTV, we would not be able to acquire new subscribers from DIRECTV under these
new agreements and our business could be harmed.
It may be difficult for us or investors to evaluate trends and other factors that affect our business due to the rapidly evolving and highly
competitive nature of the DVR services product category.
DVR services are a rapidly evolving and highly competitive product category and it may be difficult to predict the future growth rate, if any, or size of
the market, for our products and services. We may be unable to accurately forecast customer behavior and recognize or respond to emerging trends, changing
preferences or competitive factors facing us. As a result, we may be unable to make accurate financial forecasts and adjust our spending in a timely manner to
compensate for any unexpected revenue shortfall. Such inability could cause our net losses in a given quarter to be greater than expected, which could cause
the price of our stock to decline. It may be difficult to predict accurately our future revenues, costs of revenues, expenses, or results of operations. In addition,
any evaluation of our business must be made in light of the risks and difficulties encountered by companies offering products or services in new, rapidly
evolving, and highly competitive markets.
We face a number of competitive challenges in the sale and marketing of the TiVo service and products that enable the TiVo service.
Our success depends upon the successful retail marketing of the TiVo service and related DVRs, which began in the third quarter of calendar year 1999.
We compete with other consumer electronics products and home entertainment services for consumer spending. DVRs and the TiVo service compete in
markets that are crowded with other consumer electronics products and home entertainment services. The competition for consumer spending is intense, and
many consumers on limited budgets may choose other products and services over ours. DVRs compete for consumer spending with products such as DVD
players, satellite television systems, personal computers, and video game consoles. The TiVo service competes with home entertainment services such as
cable and satellite television, movie rentals, pay-per-view, Video on Demand, and mail-order DVD services. See also "We face intense competition from a
number of sources, which may impair our revenues, increase our subscription acquisition costs, and hinder our ability to generate new subscriptions."
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