TiVo Inc. on Monday cut prices for its digital television recorder to as low as $100, under its $50 million plan to rapidly increase subscribers to its service.
The San Jose, California-based company, whose fee-based digital video recorder service lets users pause live TV and customize viewing choices, said it would offer a $100 mail-in rebate on its 40-hour set-top box, which sells for $200.
The price drop comes amid growing investor concern about TiVo's growth potential, especially as close partner DirecTV prepares to offer other digital video recorder (DVR) options to its satellite TV subscribers next year.
TiVo's stock fell to a 16-month low on Friday, closing at $4.78 on Nasdaq.
The lower set-top box prices, effective Aug. 11, also apply to other TiVo models, including those sold by electronics makers Toshiba Corp. and Humax Co. Ltd.
In addition, TiVo said it updated the design of its Series2 models, developed to reduce manufacturing costs, and will sell the boxes in more national retail chains, such as Costco Wholesale Corp. and CompUSA stores.
Earlier this year, Tivo said it would spend $50 million to bolster its marketing and promotions, a plan that will swell its operating losses this fiscal year.
The drive comes amid TiVo's plan to boost subscribers to 10 million by 2008, from its current total of about 1.6 million, with revenue rising to $1 billion from $141 million in fiscal 2004, which ended in January.
In addition to increasing the ranks of its DVR users, TiVo is also building alternative features as it works to expand its offerings, especially as cable and satellite TV providers develop their own recording systems.
On Wednesday, TiVo received Federal Communications Commission approval for technology that would permit users to send copies of digital broadcast shows over the Internet to a limited number of friends.
