I | | Current Situation ……………………………………………………… | 4 | | A | Current Performance………………………………………………………. | 4 | | B | Strategic Posture…………………………………………………………… | 4 | | | | | II | | Strategic Managers……………………………………………………… | 6 | | A | Board of Directors………………………………………………………… | 7 | | B | Top Management…………………………………………………………. | 8 | | | | | III | | External Environment ………………………………………………… | 9 | | A | Natural Environment………………………………………………………. | 9 | | B | Societal Environment……………………………………………………… | 9 | | C | Task Environment…………………………………………………………. | 10 | | | | | IV | | Internal Environment …………………………………………………… | 11 | | A | Corporate Structure……………………………………………………….. | 11 | | B | Corporate Culture…………………………………………………….……. | 12 | | C | Corporate Resources……………………………………………………… | 13 | | | Marketing……………………………………………………………….…. | 13 | | | Finance……………………………………………………………………. | 15 | | | Research & Development……………………………………………….… | 16 | | | Operations and Logistics……………………………………………….… | 17 | | | Human Resources Management…………………………………………… | 18 | | | Information Technology…………………………………………………… | 19 | | D | Summary of Internal Factors………………………………………………. | 20 | | | | | V | | Analysis of Strategic Factors……………………………………………. | 21 | | A | Situational Analysis ……………………………………………………… | 21 | | B | Review of the Mission and Objectives…………………………………… | 22 | | | | | VI | | Strategic Alternatives and Recommended Strategy……………….… | 22 | | A | Strategic Alternatives………………………………………………..…… | 22 | | B | Recommended Strategy……………………………………………………. | 23 | | | | | VII | | Implementation…………………………………………………………… | 23 | | | | | VIII | | Evaluation and Control………………………………………………….. | 24 | | | | | | | Appendices | | | A | Industry Table ……..………………………………………………….… | 25 | | B | EFAS Table………..………………………………………….………… | 26 | | C | Financial Ratio…...……………………………………………………… | 27 | | D | IFAS Table………..………………………………………………………. | 28 | | E | SFAS Table………..………………………………………………………. | 29 | | F | SWOT Matrix………..……………………………………………………. | 30 | | G TOWS Matrix…………………………………………………………… H Consolidated Statement of Accounts…………………………………….. | | | | | References…...…………………………………………………………… | 35 | | | | | | | | | | | | |

I. Current Situation A. Current Performance
The founders of TiVo, Mike Ramsay and Jim Barton, has taken watching television to another level. Founded in August 4, 1997, TiVo Inc. developed the first commercially available digital video recorder (DVR). Mike and Jim were the pioneers that allowed people to assume greater control of their television viewing. TiVo offers the TiVo service and TiVo DVRs directly to consumers online at www.tivo.com and through third-party retailers. TiVo also distributes its technology and services through solutions tailored for cable, satellite, and broadcasting companies. Since its founding, TiVo has evolved into the ultimate single solution media center by combining its patented DVR technologies and universal cable box capabilities with the ability to aggregate, search, and deliver millions of pieces of broadband, cable, and broadcast content directly to the television. An economical, one-stop-shop for in-home entertainment, TiVo's intuitive functionality and ease of use puts viewers in control by enabling them to effortlessly navigate the best digital entertainment content available through one box, with one remote, and one user interface, delivering the most dynamic user experience on the market today. TiVo also continues to weave itself into the fabric of the media industry by providing interactive advertising solutions and audience research and measurement ratings services to the television industry.
This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements relate to, among other things, TiVo's future business and growth strategies including future distribution agreements as well as revenue and subscription growth from MSO customers (both domestically and internationally), future growth in TiVo's overall subscription base, TiVo's upcoming launch of TiVo Mini device in retail and launch of the MLB.com on TiVo's retail platform, future launch of TV Everywhere web portal powered by TiVo, TiVo's future marketing plans and spend, the future availability of TiVo offering with Com Hem, Cable ONE, Midcontinent, Mediacom, and GCI next year, future growth in TiVo's audience research and measurement business, future decreases in TiVo R&D spending, and the future strength and value of TiVo's intellectual property portfolio. Forward-looking statements generally can be identified by the use of forward-looking terminology such as, "believe," "expect," "may," "will," "intend," "estimate," "continue," or similar expressions or the negative of those terms or expressions. Such statements involve risks and uncertainties, which could cause actual results to vary materially from those expressed in or indicated by the forward-looking statements. Factors that may cause actual results to differ materially include delays in development, competitive service offerings and lack of market acceptance, as well as the other potential factors described under "Risk Factors" in the Company's public reports filed with the Securities and Exchange, including the Company's Annual Report on Form 10-K for the fiscal year ended January 31, 2012, our Quarterly Reports on Form 10-Q for the periods ended April 30, 2012, July 31, 2012, and October 31, 2012, and Current Reports on Form 8-K. The Company cautions you not to place undue reliance on forward-looking statements, which reflect an analysis only and speak only as of the date hereof. TiVo disclaims any obligation to update these forward-looking statements. B. Strategic Posture
TiVo pioneered the digital video recorder in 1999 only to fail at capitalizing on its innovation. Four out of ten U.S. homes have DVRs, which allow TV viewers to store shows on a hard drive so they can watch what and when they want, without suffering through ads. The problem for TiVo was that cable and satellite operators and telcos had little interest in paying TiVo for its technology. The operators simply give away boxes with generic software that TiVo’s lawyers for years have been alleging infringes on its patents. Of the 46 million U.S. homes with DVRs, only 2 million subscribe to TiVo. Its subscriber base is down 50% from 2007. Apart from cash and interest payments from legal settlements, the firm has never turned a profit.
TiVo’s disruptive impact on TV ad rates and inventory never took place the way people thought, such as Forbes, in a 2003 cover story on TiVo, which fell for this premise, too. The DVR’s real impact on TV ads amounts to a 3% loss in inventory, and CPM rates are higher now than ever. The reason: Only 16% to 20% of primetime viewing is done in playback mode and the average person still ends up watching half the commercials–too distracted by kids, a beer or the ad itself to reach for the fast-forward button. In gross terms, that yields an 8% loss in inventory. But DVRs increase viewership since people may watch three shows later for every one that would have seen live. So the real impact on ads is more like a 3% loss in inventory.
But legal and technology tides are shifting in TiVo’s favor. A settlement reached in May had EchoStar paying TiVo $500 million for damages stemming from a 2006 jury verdict that EchoStar’s Dish Network infringed on TiVo’s time-shifting patents. The victory sets a precedent in its patent cases in Texas against AT&T, Verizon, Microsoft, and Motorola. A settlement with AT&T and Verizon could yield $270 million to $600 million.
An advantage that TiVo is the rapid onset of Internet-delivered video. Cable companies are scurrying to figure out how to integrate (or compete with) video aggregators like iTunes, YouTube, Netflix, Amazon and Hulu. TiVo’s beloved user interface is a marvel at searching across the infinite video choices from these sources. Generic cable boxes lack a view to the Web, and Web-centric set-tops from Apple and Google lack a view to cable. TiVo has a set-top box to rule it all (except iTunes).
TiVo is taking calculated strategic and financial risks to win in advanced television. That includes a business-model shift from hardware company to software licensor. TiVo has increased research and development by 36% in the past six months to ensure it can handle the software licensing deals it’s been rapidly signing with smaller cable firms such as RCN, Charter, Spain’s Ono, France’s Canal and Suddenlink, all of which want to use TiVo to leapfrog into the world of advanced television. Virgin Media in the U.K. is using TiVo’s set-top box and software as the cornerstone of its advanced TV rollout to its 4 million subscribers. TiVo has preferential deals with cable operators that reach 10 million homes, and that barely scratches the international market.
In another calculated risk TiVo over the winter holidays slashed the retail price of its high-def DVR from $299 to $99 and upped its monthly service fee from $9 to $19.99, which is more in line with what cable and telcos charge for high-def DVR service. “We’re getting higher value for every new subscriber we get,” says Rogers. Most analysts expect TiVo’s own subscribers to keep declining, but its cable-partner subscriber rolls are projected to rise from 600,000 to 4 million by the end of 2013.
Add things like TiVo’s cash and customers on hand and legal payments to come and you get $10 in share value, about where TiVo trades today. Everything else, such as likely settlements with AT&T and Verizon, global expansion and a future win with a mega name such as Time Warner, is pure upside. TiVo’s stock could be worth $20 in two or three years. Some believe that Microsoft can afford to pay and buy TiVo as they did on a $8 billion for Skype
Mission Statement & Objective TiVo mission statement is to continues to revolutionize the way consumers watch and access home entertainment by making TiVo the focal point of the digital living room, a center for sharing and experiencing television, music, photos and other content. TiVo objective is to manufacture its own DVRs for retail distribution; it distributes TiVo service via cable and satellite TV providers; it sells DVR-based advertising; and, it provides audience research.
VI: Strategic Alternatives and Recommended Strategy A. Strategic Alternatives
TiVo may need to expand its strategic options (e.g., distribution through cable companies or retail via hardware partners) and enable the company to better leverage its powerful brand. We would suggest that they work with a major company to arrange co-branded TiVo Premiere DVR's (note: TiVo bills the Premiere as combining linear TV, DVR, VOD and Internet-delivered video into a unified experience delivered via an Adobe Flash-based user interface), as well as TiVo-developed non-DVR client set-top boxes. This will help TiVo provide an operator with non-DVR hardware. Alos have the company move forward with deploying TiVo hardware to its customers. The Premiere DVR's and the new client boxes will enable a TiVo-developed multi-room DVR solution, the companies say, adding that they also plan to collaborate on the development of a "next-generation 'whole home'" solution for deployment by the cable company that TiVo decide to move forward with. This will help the cable company to offer its new multi-room DVR solution.
The future cable company can launch TiVo DVR's in certain of its markets and to significantly expand that deployment throughout the year to come. TiVo, by way of its best-in-class user experience, its leading consumer feature set, and rapid time-to-market is a very compelling answer for cable company who may want to take their business to the next level. TiVo will be a significant part of the cable future plans which should redefine their subscriber proposition with 100% digital video including features like remote DVR programming, universal search with cable VOD, and access to interactive applications like YouTube, Pandora, Rhapsody, and Fandango. TiVo has modified its retail DVR's to operate with our video-on-demand systems, giving the ability to position an incredibly robust software environment. We believe this is a great example of how the cable industry can work with retail device manufacturers on innovative solutions that benefit consumers. This effort could build on other successful TiVo distribution partnerships which have also leveraged TiVo Premiere as an MSO provisioned platform. We believe that this will create a truly revolutionary approach for cable operators who seek an experience to set their service apart without requiring major investments in middleware and expensive set-top boxes. B. Recommended Strategy
Drive to being a software company as quickly as possible. TiVo needs to define a path that allows for expansion without the burden of high user acquisition costs and the distraction of the heavy distraction that user acquisition and retention represents. If TiVo has managed to port its DVR technology to a set-top platform for Comcast in a way that allows it to quickly port it to other set-tops, and if it has few restrictions on roll-outs in its Comcast agreement, it should quickly move toward other such agreements. If TiVo's porting was very model- and provider-specific, TiVo should prioritize porting to an inexpensive widely-available portal as quickly as possible. TiVo should seek the fastest possible exit path away from being a retail DVR manufacturer. Focus feature development efforts on getting users more quickly to their desired content. TiVo needs to be the Google of entertainment: not a landing site but a transit point. TiVo's strong brand derives from a loyal following that spawned from the initial platform. TiVo delivered the TV you wanted when you wanted it in a way that was not matched by any competitor, and still is not even today. That strength has not been improved upon, however. TiVo has instead been distracted by features which, though interesting, are impeded in usefulness by slow performance for most users and do little to make the company's platform attractive to cable and telephone companies who can rapidly expand TiVo's user base and provide funding for a proper extension of TiVo's functionality.
It takes a new user at least four screens and almost as many seconds for them to get from one show to another (three for a more experienced user). Finding your TV shows in long menus is even worse. Our first priority for TiVo would be to decrease this time which will affect every user and may provide patent opportunities.
Our second priority for TiVo would be to continue to leverage its best-in-class set-to-record features to make it even faster to set a "Season's Pass" or other options without disrupting the viewing experience.
Our third priority would be to leverage the recommendation engine to make TiVo discover and propose content for the user from the very first use through an initial by-passable personalization routine. This could help make TiVo more attractive for users by reducing poor experiences with TiVo recommendations which results in users ceasing to use it, while driving potential ARPU for the content distributors by making TiVo a powerful tool in the broadcast customer's arsenal to increase content awareness.
Implicit in our priorities above is that we would be focused on reducing overhead on the TiVo platform, thereby making it much easier to port and move to cheaper and cheaper platforms. I would help this by making a choice to cease support of internet-based content distribution that is not pre-fetched (e.g., photos, Domino's pizza ordering, etc), which is underutilized and makes the device seem slow and inelegant. TiVo can be an internet interface after it has retained DVR market leadership but should not do so until then.
We would transition user acquisition efforts to partners as soon as possible and focus selling and customer retention efforts on brand, targeting potential TiVo customer points-of-entry (such as when consumers move and have to switch cable companies) to keep the advertising spend as efficient as possible. We would be highly focused on figuring out how to enable TiVo's advertising delivery and research capabilities to co-exist peacefully as a revenue source for TiVo with the needs of cable companies. We would offload TiVo customer support to partners, but under strict service level agreement conditions to protect the brand.