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TiVo Cuts Loss Almost 80%

May 23, 2003|Jon Healey | Times Staff Writer

TiVo Inc. said Thursday that its first-quarter loss narrowed almost 80% as sales continued to grow and marketing costs fell.

The San Jose company, a pioneer in the field of personal video recorders, reported a loss of $7.9 million, or 12 cents a share, for the three months ended April 30. It lost $35.2 million, or 74 cents a share, in the same period a year ago.

The company attracted almost twice as many new subscribers -- 79,000 -- as it added in the first quarter of 2002. At the same time, it drove down the average monthly cost of providing its service to about $2.10 per customer, compared with about $2.77 in the fourth quarter of '02.

TiVo Chief Executive Mike Ramsey noted in a conference call that the company introduced its first "premium" service in the first quarter, a software upgrade that enables TiVo subscribers to connect their recorders to the music and digital photos stored on their home computers. The service is the first example of TiVo extending beyond digital video recording, which is "a very important part of our overall competitive advantage," he said.

Several analysts said they were encouraged by the results, but some noted that TiVo has yet to win the kind of deal with a cable operator that it has with DirecTV, the leading U.S. satellite TV service. A number of cable operators have started rolling out converter boxes with built-in digital video recorders, eating into the potential market for TiVo's products.

At the end of the first quarter, TiVo reported 703,000 customers, with about 40% obtaining their TiVo service through DirecTV.

The company makes most of its money from the fees it charges for its programming service. TiVo reported $12.7 million in service revenue in the first quarter, up from $8.2 million a year ago, and $3.4 million in revenue from licensing its technology to other companies, up from $1.6 million.

Aside from the cost of the recorders it sold, TiVo's main expenses in the quarter included $5.4 million on research and development and $4 million on sales and marketing.

Shares closed up 82 cents at $7.29 on Nasdaq. They fell as low as $6.95 in after-hours trading after the announcement.

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