As DirectTV appears to be the majority of DVR distribution today and a viable future competitor, look to balance out the risk of being too reliant on them with retailing relationships driven by bundling of lifestyle and line-of-interest channel content. For example there could be the sports bundle that includes ESPN HD for free for a year. This would serve to lock out competitors and also grow the advertising model base necessary for the company's pursuit of profitable cash flow. Third, TiVo could revolutionize the entire industry and make their services plans marked by simplicity and ease of understanding. As the case study shows there is a high level of complexity and confusion in services plans; drastically simplifying them would be a major competitive advantage.

Exhibits

Table 1: Financial Ratio Analysis (1999-2003)

TiVo Inc. Financial Ratio Analysis

Profitability Ratios

Return on Equity (%)

Return on Assets (%)

Return on Investment

Gross Margin

EBITDA of Revenue (%)

Operating Margin (%)

Pre-Tax Margin

Net Profit Margin (%)

Effective Tax Rate (%)

Liquidity Indicators

Quick Ratio

Current Ratio

Working Capital/Total Assets