GARP Research: Avoid TiVo's Stock

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GARP Research: Avoid TiVo's Stock
The company says high-def will continue to hurt the DVR service.
By Swanni

Washington, D.C. (March 30, 2008) -- GARP Research is urging clients to "avoid" TiVo's stock, saying High-Definition will continue to trigger a decline in subscribers.

TiVo reported that it had 3.9 million subscribers at the end of the fourth quarter, a slight decline from 4.1 million at the end of the third quarter.

The company said its delay in offering a low-cost HD DVR has hurt its subscription efforts. TiVo last year introduced a $299 high-def recorder, but millions have opted to lease HD DVRs for no upfront costs from their cable and satellite operators.

"I would say that the HDTV television set trend was one where we didn’t fully tie ourselves into that trend as well as I would like to see," TiVo CEO Tom Rogers said this month.

GARP, a Baltimore-based financial firm, says TiVo is now a "declining brand."

"It has struggled to compete against a flood of set-top boxes from cable and satellite operators," GARP says in a report to clients. "We see high subscriber attrition as consumers convert to high-def."

GARP also noted that TiVo is not offering rebates for its $299 HD DVR and it concludes that TiVo's recent DVR patent victory over Dish Network will not help it secure more licensing deals with cable operators.

"(We) question the growth potential of TiVo's licensing agreements with Comcast and Cox," GARP says. "We're skeptical that TiVo can use its recent patent victory over Echostar as leverage to force deals with other providers."

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Swanni (Phillip Swann) is president and publisher of TVPredictions.com. He has been quoted in dozens of publications and broadcast outlets, including CNN, Fox News, Inside Edition, The New York Times, The Washington Post, The Chicago Tribune, The Financial Times, The Associated Press and The Hollywood Reporter. He can be reached at swann@tvpredictions.com or at 703-505-3064.

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