TiVo, Inc. (TIVO)

whitemonday (< 20) Submitted: 4/27/08 7:54 AM : Start Price: $8.49 TIVO Score: -0.90

The business model is dying. DVR technology is easily replicable, and TIVO's software is not absolutely superior or uncopiable. There isn't much in terms of brand name protection, since people choose their cable based on price and service, not brand like for clothing or cars.





TIVO has to compete against Microsoft, Verizon, and AT&T. These behemoths can crush TIVO by waging a war of attrition. Even though TIVO may have won against Echostar in trial, DirecTV has introduced its own competitor, moving away from TIVO. DirecTV had been a significant MSO for TIVO.





Also, DVR technology is not the wave of the future. The wave of the future is VOD through broadband directly to your TV. Also, new televisions come with hard drives attached or compatibility with external hard drives, meaning no one will pay a monthly fee to use this service.





Finally, simply looking at their income statement and balance sheet shows a very unprofitable/unhealthy company. If their CFO remains constant from last year, they will burn their cash reserve in 2 years. Analyst EPS outlook isn't positive by then. Could simply burn out if it can't find additional financing.

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