TiVo (TIVO)

Continued rises in subscription acquisition costs and falling average revenue per subscription could lead to an unsustainable business in the future.

CEO Rogers, et.al. seem complacent to run the business as if making a profit simply is not a priority. Quarter after quarter they're in the red. But exec pay and cashing out on stock options never lag! Shareholders should be screaming. This company looks like they have every last egg in one basket: a patent infringement suit. If they lose that on appeal, they show no long term survivability. They barely held on until a $100M infusion from patent infringement. That is no way to run a business. Nor is collecting customer usage statistics for sale (slimy) and/or to turn and bombard the customer with directed advertising (also slimy). It all seems moot. If TiVo does not churn more money from lawsuits the deluge of business-wise smarter and cost-wise more competitve DVR providers will have us struggling to remember the name TiVo in a blink. Hence, a bear on this one.

TiVo has seen rising churn rate for the past 3 years, meaning a larger percentage of customers are terminating their service each year.

TiVo's HD DVR system is significantly more expensive than competing HD DVRs. Letting competitors pull ahead early in this segment of the market could be detrimental in the long run as HD service is expected to become the standard.