TiVo Ponders Giving Away Set-Top Boxes

NEW YORK – TiVo Inc. (TIVO), the television recording technology company that is facing increasing competition, on Monday said it is considering giving away TiVo set-top boxes as part of plans to win subscribers.

Chief Executive Tom Rogers said the company, whose name has become synonymous with the ability to pause live television and skip commercials, was close to offering a range of pricing options, including one plan that would include a free set-top box.

"We're continuing to pursue the prospects of zero upfront and all upfront" pricing, Rogers told the Reuters Global Technology, Media and Telecoms Summit in New York.

The company is likely to begin the test to offer free boxes, possibly in exchange for higher priced and longer term plans, fairly soon, said Rogers, who was named chief executive last July.

TiVo currently serves about 4 million subscribers, about two-thirds of them via partner DirecTV Group Inc. (DTV). It is under pressure from Wall Street to expand its customer base as DirecTV is readying its own digital video recorders.

TiVo also faces competition from far bigger cable and satellite TV providers and consumer electronics makers, all of whom are offering rival digital video recorders to consumers.

Many of the devices are more powerful than TiVos and are offered at lower prices — sometimes for free.

The company says its service, which costs most users about $13 a month, is superior, thanks to options such the ability to buy movie tickets, listen to Internet radio stations and enjoy music and photos over one's home computer network.

Rogers also pointed to a time when existing set-top boxes made by other manufacturers will be able to be upgraded by software, with no purchase necessary by the consumer.

"As much as we do get skepticism about our future, there are over 4 million TiVo subscribers — that number is growing," he said. "We feel that the notion that TiVo has hit some kind of distribution wall and is no longer a growth animal is not the case."

Shares of TiVo were flat on Monday, rising just 4 cents to $5.61 a share on Nasdaq.