SWOT Analysis

Strengths:
Strong target market Ease for watching TV Pricing structure High customer satisfaction Growing consumer base National availability

Opportunities:
Increasing demand for product within its target market High market growth Referrals from current customers

Weaknesses:

Threats:

We are in debt High spending on advertising Difficult to explain to new customers Low brand awareness Inconsistent training of sales people & turnover

Competitors within the product class Advancements in technology Angry advertisers Low barriers to entry because technology is easily replicated

Product: Benefits of TiVo

Get suggestions for shows based on preferences Record a show in one room and watch another in the other room at the same time Stay on track with all favorite shows Spend more time watching shows and less time watching commercials

Pause live TV
Fast-forward/ rewind recorded shows

Save favorite shows

Target Market: TV Geek

Men 25 to 65

Watch 6+ hours of television per day

Have a portfolio of 14+ shows Spend time watching TV at the expense of other out-of-home activities and social interaction

Like to be the expert about their shows Use TV to relax New shows keep them interested Willing to watch reruns of their favorite shows

Why Advertise to the TV Geek?

TV is growing as a primary source of entertainment from 16% up to 31% When buying consumer electronic equipment, 71% of consumers were influenced by friends or relatives TiVo owners:
Over 70% knew someone who had purchased TiVo prior to making their own purchase More than half were more influenced by friends/family than by retail demonstrations

Positioning Statement
For TV geeks (men 25-65 who watch 14+ TV shows per week), TiVo is a personal video recorder that allows you to get suggestions for

new shows that reflect your TV preferences. TiVo

is unique because it learns the actors, genres, channels, and plotlines that you enjoy and helps

you by suggesting relevant and personalized

additions to your portfolio of shows.

Price & Place

Price: same pricing
$399 for the box $9.95 per month $99 per year $199 for a lifetime (strongest emphasis in promotions)

Place: Same distribution structure

Best Buy Circuit City Sears

Strategic Partnership with Networks

Dont run the Network Executive ad Change focus of campaign from putting down networks to collaborating with them Emphasize TiVos primary benefit of helping people find new shows as opposed to avoiding commercials or networks

Create strategic partnerships with networks

Sell valuable reach & ratings data to networks

Strategic Partnership with Networks

Networks can buy advertising time
Viewers will see 1 ad for every 3 hours of TV they watch through TiVo The ads will be for other shows that TiVo predicts they will like based on existing preferences

Networks can pay to have exclusive extras and behind-the-scenes content built into shows
Extras are an incentive for TV geeks to get TiVo and another opportunity for networks to get viewers Viewers have option to record the advertised show

Promotions
With purchase of box, get first two months subscription free (incentive to try TiVo without risk to the consumer) Refer a friend who buys a lifetime subscription and get a free 14-hour box

Sales Pitch
Train salespeople in stores to give consistent demonstrations Give salespeople commission Promote TiVo to early adopter TV geeks The Lifetime subscription pays for itself in two years

Advertising
Stop print advertising and use that money on TV spots
Buy internet banner ads on TV sites and forums

Create a TiVo online community/forum so people can suggest shows to each other and discuss them Purchase 30-second TV spots during premieres

TV Commercials
The TV Guru Ad: The TV Guru has seen every show, and always knows the best ones. No one at the office can figure out how he always finds them. His secret: TiVos recommendations. Every time he finds one show, TiVo recommends another and unlocks a whole new world of shows to add to his portfolio

TV Commercials
Commercials will show the product in use Infomercials

Financials: Revenue
Subscriptions Advertisements Data Exclusive Content Total $19,500,000 $7,800,000 $375,000 $2,500,000 $30,175,000
Add 17K subscribers per quarter and make $130 per subscriber Sell the 5 major networks two 30-second ads per week for $15K each Sell the 5 major networks reach and frequency data package for $75K/year Sell the 5 major networks rights to put exclusive content within their shows at 500K/year

Breakeven Analysis
Jun-00 Subscribers Revenues
Subscriptions Advertisements Data Exclusive Content $719.00 $3,250.00 $1,300.00 $62.50 $416.67 $6,500.00 $2,600.00 $125.00 $833.33 $9,750.00 $3,900.00 $187.50 $1,250.00 $13,000.00 $5,200.00 $250.00 $1,666.67 $16,250.00 $6,500.00 $312.50 $2,083.33 $19,500.00 $7,800.00 $375.00 $2,500.00

Sep-00

Dec-00

Mar-01

Jun-01

Sep-01

Dec-01

48

65

82

99

116

133

150

Costs
Costs of Services R&D Sales & Marketing Sales & Marketing - Related Parties General & Administrative Stock Based Compensation Other expenses $4,988.00 $5,679.00 $11,384.00 $5,349.00 $3,631.00 $919.00 $0.00 $4,988.00 $5,679.00 $11,384.00 $5,349.00 $3,631.00 $919.00 $0.00 $4,988.00 $5,679.00 $11,384.00 $5,349.00 $3,631.00 $919.00 $0.00 $4,988.00 $5,679.00 $11,384.00 $5,349.00 $3,631.00 $919.00 $0.00 $4,988.00 $5,679.00 $11,384.00 $5,349.00 $3,631.00 $919.00 $0.00 $4,988.00 $5,679.00 $11,384.00 $5,349.00 $3,631.00 $919.00 $0.00 $4,988.00 $5,679.00 $11,384.00 $5,349.00 $3,631.00 $919.00 $0.00

Loss from Operations

Interest income Interest expense and other

-$31,231.00 $1,907.00 $112.00

-$26,920.83 $1,907.00 $112.00

-$21,891.67 $1,907.00 $112.00

-$16,862.50 $1,907.00 $112.00

-$11,833.33 $1,907.00 $112.00

-$6,804.17 $1,907.00 $112.00

-$1,775.00 $1,907.00 $112.00

Net Loss

-$29,436.00

-$25,125.83

-$20,096.67

-$15,067.50

-$10,038.33

-$5,009.17

$20.00