TI Vo - Case Analysis

Issues Faced by TiVo   

High customer satisfaction, but slow growth Financial losses due to inefficiency of marketing and sales expenses Saturation of Ti VO within specific consumer segments

1. According to Keast “there is a mystery in the sharp contrast between the inertia of prospects and the evangelical zeal of TiVO users. What do you think could be going on? Try to be creative and list a large number of conflicting reasons by taking multiple points of view. There are times when consumers do not like to buy a product even if it is the logical choice and preferable thing to do. This happens because consumers are resilient to change and hence they are reluctant to switch from a product to an alternative. In TiVo’s case, their consumers are perhaps not ready to shift from their conventional TV viewing habits to the new product of TiVo. Therefore even though awareness and intention to purchase is high, it is not converting into sales for TiVo. Consumers often are likely to overrate their existing product. Hence products which offer only incremental value over the existing product find it difficult to overcome inertia. To overcome this, TiVo must communicate a much higher value proposition. They should look to add more features in their product and communicate exponentially higher advantages and benefits of their product over the conventional TV viewing experience. From the point of view of the company, they have developed a product which they overvalue over the existing product and hence expect consumers to switch to TiVo without much efforts. This results in a lack of proper communication and product development

2. What insights do you directly derive from the data summarized in the text and presented in the exhibits that might help to guide the growth of TiVo? TiVo was launched in the year 1999. It launched with an evolutionary feature of personal video recording which many TV user appreciated. It is mentioned in the exhibit 1 the subscription pattern of TV subscriber. Here, we can notice that the new subscribers are also growing at a rate (CAGR) of 46.78% which is more than the growth in the total subscribers which is 36%. From this we can infer that the potential customers are adopting TiVo at a rapid pace and it is an indication of growth prospects in near future.

In exhibit 3, it is given that the major purchase influencers are referrals followed by internet articles. TiVo can leverage these two channels by providing satisfactory services and satisfactory entertainment experience to the existing subscribers. The long-term effect of this strategy will increase subscriber base and profitability of the company. In exhibit 4, it is mentioned that user found “recording/season passes” as a most valuable feature in TiVo. By enhancing this feature and making it even more user-friendly to the potential customers and communicating the same to the potential customer by designing a suitable value proposition will help the company in future growth prospects. In exhibit 5, it is given that there is a shift in the demographics of the TiVo subscribers. In Oct 2000, college pass-outs constitute 47% of TiVo customer basis. But, in Nov 2000-Feb 2001 the graduate school pass-outs constitutes 170% of TiVo consumer basis. Designing marketing strategy by keeping in view the changing demographics will help TiVo to gain more market share in the near future. In exhibit 7, TiVo has impacted the lifestyle of the customer and changed it completely by providing a convenient entertainment experience. 82.6 % of the viewers stated that TiVo has enhanced their experience of watching T.V. TiVo has able to cater the needs of the customers of different age groups ranging from adults to kids. The kind of appeal TiVo has generated from the existing subscribers can be leveraged to design a marketing campaign to attract more potential customers thus realizing broad customer base and market share in future. 3. What is the TV viewing behaviour/pattern in India? What are some of the recent trends?

According to the report titled “Future of Indian Television – Key Trends” by Ernst and Young, these are the following trends that will drive TV viewing behaviour in coming years.

1. Unbundling of Content Internet penetration is increasing in India. With the advent of goodquality broadband and increasing per-capita income, TV content will get unbundled. There will be a shift from channel loyalty and TV loyalty to program loyalty and device disloyalty 2. Technology will enable Omni platform consumption

With the evolution in technology, consumers are not restricted to their living room to watch their favourite shows. With advent of technology like Wi-Fi, consumers can enjoy their favourite content across various formats and devices. Consumption will move from one location to many. 3. “On-tap” content will lead to time-shifted bingeing The concept of prime time slots at 9 o clock would cease to exist. Consumers won’t have the need or urgency to watch certain programs live unless its sports. Other programs will be available over the internet any time of the day. This will have major implications regarding commercial slots scheduled between programs for marketers. 4. Increased broadband will result in increased piracy In India where there are no serious laws against piracy, increase in broadband penetration would directly result in increase in piracy. This problem would be multi fold when broadband prices come down to on par with cable prices. 5. Unicasting could lead to result based ad models Ad service will change to unicast models, targeting individual viewers, like the internet. Hence advertisers will begin to pay per ad served and viewed, and increased measurement will be the norm 6. Social dynamics will lead to more real-time feedback Apart from viewership measurement, trends from social media like Facebook, Twitter, etc. will provide inputs to marketing, pricing and story-telling.

4. What are the ways in which TV viewing behaviour is measured and used by the marketers?

In India, INTAM is the only electronic rating agency functioning in India. It follows two methodologies which are described below. 

First is frequency monitoring. In this method people meters are installed in sample homes and these electronic gadgets continuously record data about the channel watched by the family members and relays it back to the station to be complied by masking the personal details of the user.

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Second method is the picture matching technique. In this, people method continually records a small segment of the picture that is being watched on the television set owned by the family and relays time duration, program and other specific details back to the rating agency.

Marketers will be able to utilize the data to effectively communicate with the target segment. A FMCG company for example can schedule its advertisement targeted towards youngsters when the rating for kids program is high. Furthermore, they can select the content provider based on the TV viewership obtained by them, thus calculating the impact of your advertisement would be easy as you know the average viewership for any programme at a given point of time.