TiVo 2013 Annual Report Download - page 22

Table of Contents
customers who would have otherwise chosen the TiVo service offered direct to consumers by us may instead choose to purchase the TiVo-
branded DVR solution from our licensing partners. Additionally, to the extent that potential customers defer subscribing to the TiVo service in
order to wait for announced, but not yet deployed in their geographic area, TiVo-branded DVR solutions from our licensing partners, the
growth of our TiVo-Owned subscriptions could be reduced. If our TiVo-Owned subscriptions continue to decrease, our business will be
harmed.
We compete with digital cable, satellite, and telecommunications DVRs  Cable, satellite, and telecommunications service providers
are accelerating deployment of integrated cable and satellite receivers with DVRs that bundle DVR services with other digital services and do
not require their customers to purchase hardware. If we are not able to enter into agreements with these service providers to embed the TiVo
service into their offerings, our ability to attract their subscribers to the TiVo service will be limited and our business, financial condition, and
results of operations would be harmed.
We also expect to compete with digital cable, satellite, and telecommunications services that provide consumers with DVR
and VOD-based services via a broadband connection on an on-demand basis  We are aware of at least one U.S. cable operator,
Cablevision, Inc., which has deployed server-based DVR technology. To the extent that cable, satellite, or telecommunication operators offer
regular television programming with DVR services as part of their server-based VOD offerings or offer linear television programming in other
VOD-based broadband delivered services, consumers would have an alternate means of watching time-shifted shows besides physical
DVRs. In such an event, competitors would be able to deploy competing DVR services or equivalent VOD-based viewing services (such as
the increasing TV Everywhere services from most Pay TV) without the expense of deploying DVR hardware in consumer homes. Such an
event would impair our ability to compete in a cost-effective manner with these television providers as well as attract and retain customers, in
which case, our business, financial condition, and results of operations would be harmed.
It is expensive to establish a strong brand  We believe that establishing and strengthening the TiVo brand is critical to achieving
widespread acceptance of our products and services and to establishing key strategic relationships. The importance of brand recognition will
increase as current and potential competitors enter the DVR market with competing products and services. Our ability to promote and
position our brand depends largely on the success of our marketing efforts and our ability to provide high quality services and customer
support. These activities are expensive and we may not generate a corresponding increase in subscriptions or revenues to justify these costs.
If we fail to establish and maintain our brand, or if our brand value is damaged or diluted, we may be unable to attract subscriptions and
effectively compete in the DVR market.
We rely on our retail partners and service providers to market and distribute our products and services. In addition to our own
efforts, our retail partners 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. Additionally, we now have arrangements with many service providers, both domestically
and internationally, to market and promote 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. Further, if any of our service providers elect to support a competing technology, our business
could be harmed despite the fact that many of our agreements with our service providers include exclusivity provisions, minimum
deployment commitments, or minimum financial commitments. As a result, we would spend significant resources to support the TiVo
service and DVRs and other devices that enable the TiVo service or would otherwise see a reduction in new and existing service provider
deployments from such service providers. 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 additional subscriptions to the TiVo service will be limited.
Many consumers are not aware of the full range of benefits of our products and services. DVR products and services are a
continually evolving consumer electronic category. Retailers, consumers, and potential partners may perceive little or no benefit from DVR
products and services. Many consumers are not aware of its benefits, such as the ability to seamlessly integrate linear and broadband/VOD-
based video, time-shifting of linear television, transfer of recorded programs to portable devices, access to web based and broadband delivered
content not available through traditional cable and satellite operators, and therefore may not value the benefits of the TiVo service and
products. We will need to continue to devote a substantial amount of time and resources to educate consumers and promote our products in
order to increase our subscriptions. We cannot be sure that a broad base of consumers will ultimately subscribe to the TiVo service or
purchase the products that enable the TiVo service.
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