1. How does the case illustrate the environment of high-tech companies?

2. Evaluate TiVo’s strategy in the light of its environment.

3. Evaluate TiVo’s actions after Mike Ramsay stepped down – did the company make the right moves?

4. What are the strategic options TiVo has at this stage?

Pioneered by SGI veterans Mike Ramsay and Jim Barton, TiVo redefined TV watching by launching its first DVR or digital video recorder in 1999. The DVR allows TiVo’s 3.3 million subscribers to digitally record up to 300 hours of TV or 32 hours of high definition TV and play it back at their leisure. In addition to buying a DVR, customers also pay for the TiVo subscription service. 

Ramsay and Barton put together the two aspects of the product together – the software, which was based on open-source platform Linux, and the hardware, which was made with the help of original equipment manufacturers, such as Philips and Sony. The company went public just a few months after its first product shipment in March 1999 after staggering success in subscription sales. Since then, its stock price has fluctuated from $2-3 per share to a high of $78 per share. The addition of new subscribers has slowed with the entry of lower cost competitors such as Time/Warner Cox, Comcast, DISH Network and others. In light of the rapid changes in the consumer entertainment industry, TiVo’s top management (Mike Ramsey has stepped down) must decide how to deliver returns to investors.