Tivo Case Analysis

TiVo and Consumers

TiVo is a brand of digital video recorder that offers numerous functions far advanced than the regular VCR or DVD player. The TiVo recorder has the ability to pause and replay live TV as well as an array of flexible recording services that is personalized for the consumers.

The adoption of TiVo when it was first released was facilitated by the belief that consumers who owned a TiVo black box and subscribed to the TiVo service can take control of what programs to watch and when to watch them. The device attracted consumers who were tired of missing their favorite shows because they were too busy to watch them. TiVo also enabled people to fast-forward over irreverent advertising. TV watchers can “pause” a live show to conveniently handle interruptions too. As shown above, the services that TiVo provides allow the consumer to be in control and makes TV viewing “a lot more enjoyable.”

Despite the high satisfaction from current users, there was a lack of awareness for the brand and the category in the market. Non-users were having a hard time understanding the product. TiVo’s black box required extensive explanations and demonstration in order for consumers to understand it. Even if the consumer understood TiVo’s features, the price might deter the consumer from buying it. Furthermore, the lack of market awareness made the adoption of TiVo difficult.

In order for TiVo to increase its awareness, they should strive to set a specific target market. Young professionals, sports fans, and families would be the ideal target market since TiVo’s pause and recording features would add some much needed flexibility to their busy lives.

Branding Strategy

TiVo’s proposed value proposition is more for more. It provides more benefits for a higher price. For example, unlike the VCR, TiVo can record up to thirty hours of television content without the use of videocassette tapes. Because of special features like these, TiVo is priced $200 to $800 higher than a standard VCR, which can sell for less than a hundred dollars.

TiVo positions itself on both benefit and beliefs and values. Like Volvo’s product benefit is safety, TiVo’s benefit is the increase in the amount of television programming that consumers can watch. The strongest brands, however, go beyond benefit positioning, which is why TiVo also positions itself on the belief of giving consumers the ability to program their own network. This ties into its core benefit of controlling when and what to watch on TV.

In terms of personality, TiVo can be described as being intelligent, fun, and sensible. It can pause, record, fast-forward, and rewind live TV, something that VCRs can never do. It will look at what kinds of programming the consumer has watched and offer suggestions of new shows based on this. It will also automatically record shows that it knows the consumer enjoys.

TiVo has a pretty strong branding strategy already. One of the main reasons for it is that it is based on the core benefit of allowing consumers to control when and what to watch on TV. The one area that needs improvement, however, is that the actual product is not defined specifically. At its conception, the press was unsure how to classify TiVo which made recommending it difficult. More people will buy TiVos when they can accurately and actually define what exactly it is.

Networks, Advertisers and Competitors

TiVo was a major source of concern for the TV networks, advertisers and cable and satellite companies. With customers now having the ability to essentially create their own network, with or without commercials, these groups faced a dilemma in whether they should view TiVo as a threat or as an opportunity.

In 1999, advertisers spent nearly $52 billion on television advertising. With TiVo in the picture, however, advertisers no longer had the same captivated audience as before. This was why advertisers wanted TiVo to be a new medium for their commercials. New statistics would be available as to how many people are recording what show and which commercials are being watched, and which commercials are being skipped. This information will make it easier for advertisers to create more personal, attention-grabbing commercials.

TV network stations also faced changes thanks to TiVo’s innovative technology. The normal rules of placing shows on specific days at a certain time no longer applied