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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 TiVos 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 wont 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.

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.