Case Report: HBR TiVo in 2002 (Consumer Behavior)
Marketing Management, Fall 2012
This brief report attempts to tackle the HBR TiVo in 2002 case study. The report highlights the main issues facing the company in 2002 and then proceeds to analyze the internal and the external environments around TiVo at the time with a special focus on relating the analysis to consumer behavior. The report finally ends with proposing a number of solutions that can be applied by TiVo to resolve the issues at hand based on a better understanding of TiVo customers’ buying behavior. 2. Background on TiVo Inc.:
* TiVo Inc. was founded by Jim Barton and Mike Ramsay in 1997 * Under the brand name “TiVo” The co-founders developed and marketed a Digital Video Recorder (DVR) that digitized video onto a hard disk * The first TiVo DVR shipped in Q1 1999 and was capable of only digitizing analog TV feed. Later on, new models that recorded from digital video sources were eventually introduced by the company * To differentiate its product from other DVR offerings, TiVo heavily invested into R&D to build up sophisticated software that automatically records programs based on user requests and interests (based on actors, directors, genres, season ... etc). The software also offered a superior Electronic Program Guide (EPG) * TV implement a patented feature TiVo calls “Trick Play" that allows the viewer to pause live television and rewind and replay up to a half hour of recently viewed television * TiVo DVRs were initially offered as “standalone” hardware directly sold by TiVo, but the company later on opted to license its software to third party manufacturers and cable/satellite operators * TiVo DVRs have further evolved today into “HD Smart DVRs” that record HD content and connect to the Internet to provide access to multiple Video-on-Demand (VoD) services such as YouTube, NetFlix, and Hulu
3. The Underlying Dilemma: Issues Facing TiVo in 2002
Although TiVo seemingly had a winning product in 2002 that was technologically superior to other offerings available at the time and existing TiVo customers were apparently satisfied with the features offered by the company’s product line, several issues were building up fast to the dismay of TiVo Executives. Neither the technology advantage nor the high satisfaction rate of current customers has helped the company meet its sales forecast or its anticipated market share. TiVo marketing executives were initially considering conducting more market research and forming up new focus groups to try to figure out why the product is not living up to the company’s expectations, but ultimately; they rightfully decided that they the key was not to collect more data, but to actually further scrutinize the wealth of information that TiVo already had in hand to look for answers. TiVo had access to valuable sources of data to help with this undertaking: First, there was the information collected from the interactive survey provided by existing customers and secondly TiVo executives realized that they would be able to look more closely at the anonymously collected user logs that could be used to unlock more information with regards to the users’ behavior patterns. Overall, TiVo’s marketing executives wanted to work their way towards further understanding the nature of TiVo’s appeal to existing and potential customers. They also hoped to find new ways to approach all the other actors in the broadcasting industry (TV networks, advertisers, content providers and cable operators) to have a better understanding of TiVo’s relevance in the life of television consumers. The marketing executives understood that they had to break though the inertia of the potential customers and the other stakeholders in the TV broadcasting industry to place the product back on track. As part of their analysis, TiVo’s executives identified the...