Case Title: Tivo: Global Branding and Advertising

Case Title: Tivo: Global Branding and Advertising

Background

1. Tivo Founded in 1997 by Jim Barton and Michael Ramsay who left Silicon graphics with a vision to make a home network that would integrate all household communications, but settled on focusing on the television.

2. They created a device that was a digital video recorder with capability to allow users to pause live shows or rewind/forward recorded shows. In addition it allowed the users to skip commercials, allowed

3. First Tivo was shipped in March 1999. It allowed users to control what they watched, as well as when they wanted to watch it.

4. In May 2000 Brodie Keast (VP of marketing & sales) reviewed a catchy ad showing two big guys throwing out Chief Network programmer out of a building, meaning that they were regaining their control

5. Tivo has only penetrated .04% of the TV subscribers market

6. Even though 90% people said they would recommend it, the lackluster sales led Tivos marketing team to believe that the product lacked awareness even though it was in the retail electronic stores

7. It allowed 30hrs of programming without videocassettes, and automatically detected and recorded programs based on your preference.

8. The slogan was “You watch anything you want, when you want it”

9. Two main factors: hard-drive capacity & recording quality

10. Instead of manufacturing the hardware, they worked with Sony & Philips and outsourced to manufacture, distribute and promotion to retailers

11. This allowed them to focus on the true nature of company – entertainment service.

12. Tivo was marketed as a service 9.95 month, 99 year or 199 for lifetime

13. Initial marketing through print ad and website led to some confusion on how this product should be introduced

14. There were some technical problems as well as confusion on using/navigating the unit’s menus

15. The challenge in marketing this product was that was inviting people to change their consumption habits

16. $52 billion was spent in television advertising for prime time (8pm to 11pm)

17. Season pass – most popular feature – automatically record all of episodes

18. Thumbs up/Thumbs down button gave users ability to instantly rate shows, which provided Tivo with user preference so it could provide suggestions and record shows based on user preferences

19. Non-users were concerned that Tivo was spying on their viewing habits and selling them.

20. Networks and advertising agency was concerned with ability of Tivo to shift programming (make personal TV line-up) and skip advertisements. Networks lose the ability to position a popular show at prime time.

21. Tivo goal became to enable consumers to be in control at all times and data about users should remain inaccessible except in aggregate format.

22. Good thing was that Tivo allowed major networks to be equity partners with them and worked with advertising partners on defining formulas of the future (targeted advertising like the internet but with opt-in, different versions of the commercial etc, telescoping ads – sequence of shorter screens that user could select.).

23. Tivo could allow networks to establish audience size and characteristics in advance to market advertising slots more effectively

24. Competitors such Replay TV manufactured its own hardware, but higher price, but no subscription fee – more commission for salesperson), Ulitmate TV (bundle with satellite television, allow personal video recording, recoding two shows simultaneously, fastforward upto 300 times vs Tivos 60 times), Jovio (free with more ad inserts), Seagate, Thomson multimedia ( hardware in TV)

25. Lessons – high turnover of salespeople and extensive explanations prevented higher sales at point of purchase, pricing was way too high (more than a regular TV, not sufficient awareness (needed demo as it was difficult to explain and understand) and needed change in way people watched TV

26. Early adopters marketing strategy (similar to viral marketing) was not very successful due to owners no consistently highlighting all the capabilities in a standardized way.

27. Option explored to overcome dilemma were:

a. Build