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TiVo's 4th-Quarter Loss Narrows

March 05, 2004|Jon Healey | Times Staff Writer

Digital video recording pioneer TiVo Inc. on Thursday reported a narrower loss for the quarter ended Jan. 31, aided by an 85% increase in revenue and significantly faster growth in subscriptions.

The San Jose-based company also announced plans for a $50-million increase in spending on rebates and promotions to lure more subscribers, predicting that the effort would more than double its customer base within 12 months.

Chief Executive Mike Ramsey said the spending would drive up TiVo's losses in the coming year but would help the company turn profitable by the end of January 2006 -- which would be almost nine years after TiVo helped create the category of personal video recorders.

The company's loss for its fiscal fourth quarter was $12.4 million, or 18 cents a share, compared with a quarterly loss of $32.5 million, or 56 cents, a year earlier. TiVo reported quarterly revenue of $42.6 million, up from $23 million.

For the fiscal year, TiVo posted $141 million in revenue, up from $96 million. That translated into a loss of $32 million, or 48 cents a share, compared with the previous year's loss of $82.3 million, or $1.61.

Employing a built-in hard drive instead of videotape, TiVo recorders enable users to pause, rewind and replay shows as they are broadcast. The devices also make it much easier to fast- forward through commercials, and they give advertisers new ways to address viewers.

Many analysts had predicted that TiVo would bring about sweeping changes in the television industry, but the company has attracted customers far more slowly than its backers expected. The pace appears to be quickening, however: TiVo added 330,000 subscribers in its most recent quarter, three times as many as it signed up in the previous fourth quarter.

About half of the company's 1.3 million subscribers signed up through News Corp.'s DirecTV, which sells TiVo in a package with its satellite TV service. The company predicted it would gain 1 million subscribers through DirecTV in the next 12 months and 500,000 to 600,000 subscribers through the sale of stand-alone TiVo recorders.

Ramsey also said the company believed it could boost revenue 75% annually for the next three or four years and hit 10 million subscribers.

TiVo shares rose 44 cents to 11.46 on Nasdaq before the company's earnings were announced. In after-hours trading, shares rose as high as $12.22.

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