TiVo 2009 Annual Report Download - page 8

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Table of Contents
Today, the emergence of broadband video is once again revolutionizing the way people consume entertainment. In fact, the rapid growth of broadband
video means a virtually infinite world of content choices now exists along with much greater convenience in how and when that content is viewed. The rapid
proliferation of content requires a means to effectively sort through, select from, and organize the growing volume of broadcast, cable, and broadband video
content choices including television shows, movies, user generated videos, music, and other personal content including photos and home videos – whether
that content was recorded via a DVR or delivered via broadband.
Television Distributors See Advanced Television Technology as a Competitive Asset and a Threat. Nearly all of the major television distributors in
the United States including Comcast, DIRECTV, Dish (formerly "EchoStar"), Time-Warner Cable, and others, are offering DVR technology to their
customers. In addition, some are developing strategies to address (albeit in very diverse ways) the proliferation of broadband video. Some of these companies
have indicated they consider such services a competitive tool to help differentiate their pay television services by offering their customers more programming
features. These operators are looking for ways to more effectively attract and retain consumers to their own offerings and we believe that our unique user
interface and software, including both our DVR and broadband television capabilities, can help increase customer satisfaction and reduce churn for television
distributors in the United States and beyond. This is also a risk to our business to the extent that these companies view TiVo as a competitive threat and
economically harmful rather than as a potential business partner.
DVR and Broadband Video is Changing the Television Advertising Industry. The decline of linear television viewing is requiring television
advertisers to evaluate new and different ways to reach out to consumers. The DVR and broadband video have given viewers the freedom to view content
when they want; and this time shifting has made it more difficult for advertisers to be assured that their commercials will be viewed by audiences at the
regularly scheduled time the program is aired by network or local television stations. DVRs, in particular, allow viewers the freedom to fast forward through
all or a portion of commercial advertising incorporated into television and other programs, which means that advertisers are not assured that their commercials
will be viewed at all. TiVo offers other programming options, such as video delivered by broadband to the television, which may result in further audience
fragmentation.
Our Solution
We have created a unique set of technologies, products, and services that meet the needs of consumers, television distributors, and the advertising
community. Our goal is to change the way consumers receive and watch television, broadband video, and advertising and to generate revenues through the
deployment of our branded services and technology to television viewing households worldwide.
Provide Compelling, Easy-to-Use Consumer DVR Offering. The TiVo service, combined with a TiVo-enabled DVR, has an easy, intuitive user
interface and many features that we believe dramatically improve a consumer's television viewing experience. Depending on the model, TiVo-enabled DVRs
and in the future TiVo-enabled set-top boxes and connected consumer electronics can support analog cable, digital cable, satellite, over-the-air broadcast
television, and streaming and downloaded broadband video content, including standard definition and high definition television. Although TiVo's newer retail
products are not compatible with satellite service, we are working with DIRECTV to introduce a new platform that will do this. The TiVo service enables
consumers to watch TV on their own schedule by automatically finding and digitally recording their favorite shows, or allowing consumers to access their
favorite content over broadband. The TiVo service allows consumers to find new shows to watch through features that enable them to search for shows to
record by subject, title, genre, actor, director, or channel. The TiVo service can also suggest shows that consumers may like based on shows they are
recording. Consumers can also pause and rewind live and recorded television.
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