TiVo 2013 Annual Report Download - page 43

Table of Contents
who have TiVo-enabled devices (such as a DVR or TiVo Mini) and for which TiVo incurs acquisition costs. The MSO lines refer to
subscriptions sold to consumers by MSOs such as Virgin, ONO, RCN, Grande, GCI, and Suddenlink, among others, and for which TiVo
expects to incur little or no acquisition costs. Additionally, we provide a breakdown of the percent of TiVo-Owned subscriptions for which
consumers pay recurring fees as opposed to a one-time prepaid product lifetime fee.

   
 126 117 114

TiVo-Owned (63)(80)(157)
MSOs 1,123 950 387
 1,060 870 230

TiVo-Owned 966 1,029 1,109
MSOs 3,243 2,120 1,170
 4,209 3,149 2,279
 171 194 253
 51%53%55%
We define a “subscription” as a contract referencing a TiVo-enabled device such as a DVR or TiVo Mini for which (i) a consumer has
committed to pay for the TiVo service and (ii) service is not canceled. Each TiVo-Owned or MSO subscription represents a single TiVo-
enabled device (as defined above) and therefore one or more TiVo-Owned or MSO subscriptions may be present in a single household. We
currently do not report based on households. We count product lifetime subscriptions in our subscription base until both of the following
conditions are met: (i) the period we use to recognize product lifetime subscription revenues ends; and (ii) the related TiVo-enabled device has
not made contact to the TiVo service within the prior six month period. Product lifetime subscriptions past this period which have not called
into the TiVo service for six months are not counted in this total. Prior to November 1, 2011 we amortized all product lifetime subscriptions
over a 60 month period. Effective November 1, 2011, we have extended the period we use to recognize product lifetime subscription revenues
from 60 months to 66 months for product lifetime subscriptions where we have not recognized all of the related deferred revenue as of the
reassessment date. We are not aware of any uniform standards for defining subscriptions and caution that our presentation may not be
consistent with that of other companies. Additionally, the subscription fees that our MSOs pay us are typically based upon a specific
contractual definition of a subscriber, subscription, or a TiVo-enabled device which may not be consistent with how we define a subscription
for our reporting purposes nor be representative of how such subscription fees are calculated and paid to us by our MSOs. Our MSOs
subscription data is dependent in part on reporting from our third-party MSO partners.
TiVo-Owned subscriptions declined by 63,000 subscriptions during the fiscal year ended January 31, 2014, as compared to a decrease of
80,000 in the same prior year period. This improvement was driven by increased TiVo-Owned subscriptions gross additions combined with
decreased churn as a greater portion of our TiVo-Owned subscription base has transitioned to our newer hardware models which have lower
churn. TiVo-Owned installed subscription base is approximately 1.0 million subscriptions as of January 31, 2014, which was relatively flat
as compared to the same prior year period.
For the fiscal year ended January 31, 2014 our MSO installed subscription base increased by 1.1 million subscriptions to approximately
3.2 million subscriptions. This increase in subscriptions is due to subscription growth from a variety of partners including Virgin, RCN,
Suddenlink, ONO, Grande, GCI, Midcontinent, Com Hem, CableONE, and others. This subscription growth is largely related to
international MSO subscriptions and while we expect continued growth in our MSO installed subscription base as additional distribution
deals launch, we anticipate international MSO subscription growth to continue to be a primary driver of this growth.
TiVo-Owned subscriptions declined by 80,000 subscriptions during the fiscal year ended January 31, 2013, as compared to a decrease of
157,000 in the same prior year period. This improvement was primarily driven by decreased churn. TiVo-Owned installed subscription base
is approximately 1.0 million subscriptions as of January 31, 2013, as compared to approximately 1.1 million as of January 31, 2012. We
believe this decrease in total TiVo-Owned subscriptions was largely due to continued pressure on subscription gross additions resulting from
increased competition from DVRs distributed by cable, telco, and satellite companies as we continued to have fewer TiVo-Owned
subscription gross additions than we had TiVo-Owned subscription cancellations.
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