TiVo makes strides with marketersAdvertising agreements give added weight to firm's impact in the industry. 2/04/2001 07:00:00 PM Eastern
TiVo made two moves last week that the company said would accelerate it toward profitability while putting some distance between itself and prospective competitors.
Under terms of a new marketing agreement with AOL Time Warner, TiVo will receive up to $43.5 million in additional working capital and will, in turn, spend $21.5 million to advertise and promote TiVo products in AOL Time Warner print, television and online properties. AOL Time Warner owns 15% of TiVo.
TiVo Inc. last week reported fourth-quarter losses of $2.19 a share and fiscal year earnings last week. For the quarter, TiVo reported a loss of $2.19 per share, handily beating consensus estimates of $2.64. For the year, TiVo lost $206.4 million, or $5.55 per share.
TiVo added 80,000 new customers during the fourth quarter, CEO Mike Ramsay said in a conference call with analysts and reporters. Ramsay projected that the company would add up to 220,000 new subscribers this year.
In a separate announcement, TiVo added Miller Brewing to its charter advertising program. The one-year agreement gives Miller 30 minutes of pre-loaded content on newly purchased TiVo recording units. Financial terms of the deal were not disclosed, but Michael Ramsay, TiVo chief executive officer, said the two deals would bring TiVo closer to turning a profit.
"These new relationships confirm that the industry is beginning to embrace personal television in a real financial way," Ramsay said last week.
Newly purchased TiVo boxes will come loaded with a half-hour programming block produced by the advertiser. The first thing subscribers will see when they fire up their new TiVo system will be a list of advertiser-produced programs. As with any other content, consumers can choose to watch it, save it or delete it.
"The onus will be on the advertiser to make sure that their content is compelling to the viewer," said Stacy Jolna, TiVo's chief programming officer, who added that TiVo would retain ultimate veto power over advertiser content.
Miller has made no decision yet on how it might use the time. Another TiVo client, the Professional Golfers Association, produced a half-hour magazine that included golfing bloopers and PGA tour highlights coupled with golf equipment merchandising and cross promotion to PGA's Web site.