February 25, 2004 1:12 PM PST

TiVo replays pricing move, ups storage

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TiVo cuts prices on flagship recorders

February 2, 2004
Digital video recorder company TiVo will offer a $50 rebate on its recorders, including a new 140-hour box, as it looks to ride its sales momentum.

The San Jose, Calif.-based company will announce on Friday $50 rebates on all Series2 digital video recorders. It also plans to release its most capacious machine ever, a recorder with 140 hours of storage.

After the rebates, the 40-hour box will cost $149, the 80-hour $249 and the 140-hour box $349. The rebate offer is good from Feb. 27 to May 31 and doesn't apply to DirecTV systems. Consumers must also purchase the service by June 30 to receive the rebate. A monthly service plan is $12.95, while a lifetime plan, meaning for the recorder, is $299.

The company cut $50 off the price of its 40-hour and 80-hour boxes earlier this month.

Late last year, TiVo passed the 1 million subscriber mark, the point in the consumer electronics industry at which a product is viewed as a mass-market device. This often leads to a price drop for products, as higher demand allows companies to take advantage of economies of scale and negotiate lower rates with manufacturers, then pass that cost saving on to consumers.

The recorders use a hard drive to store live television shows, so people can pause the broadcasts as they're watching them. Additionally, the TiVo service allows consumers to preset the boxes to record future shows, among other features.

Typically, price cuts translate to improved fortunes for a company, but challenges are looming for TiVo: Cable giant Comcast recently announced that it plans to offer DVR service to its subscribers, and software giant Microsoft is offering DVR service to users of its Media Center PC operating system.


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