Wednesday, September 07, 2005

TiVo is Almost Free-Vo

According to the Los Angeles Times TiVo Inc. is reducing the cost of its recorders by almost 50%. Adding the service increases your cable bill by approximately $12.95 a month.

The story reports that TiVo Inc. will give a $150.00 rebate to purchasers who sign up for a one year subscription to TiVo service. Looking at the action on the stock market, it appears that this move may have had a slight positive effect on the value of TiVo shares. Though the $5.17 value does seem underpriced to me given the technological revolution that is TiVo, but it is understandable when you consider two things. First, the market's reluctance post 2000 bubble burst to trust tech stocks, and second the lack of a successful "advertisement delivery system" on TiVo limits its earning potential to sales and subscriptions entirely. None of this takes into account the rise of competitors and cable companies co-opting the technology.
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