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Should you buy TiVo stock?

Posted Jan 26th 2009 3:45PM by Peter Cohan (RSS feed)
Filed under: Netflix, Inc. (NFLX), Comcast Cl'A' (CMCSA)

TiVo, Inc. (NASDAQ: TIVO) invented the Digital Video Recorder (DVR) that records TV programs and lets you fast forward through commercials. If there ever was a disruptive technology, the DVR is it -- it disrupts scheduled TV and the related advertising revenues that pay for it. So the TV broadcasters have fought back, and the question for investors is whether TiVo's response to that retaliation makes it an attractive investment.

There are five reasons that TiVo might be worth a look:

Big, fast growing market. TiVo estimates that between 25 million and 30 million households had DVRs in 2008 and that number could double in 2009. Furthermore, the number of DVRs per household is growing from one to three. That growth results from the realization that DVRs let people control when they watch shows and skip the advertisements. DVR growth also springs from the way cable and satellite companies have been using DVRs to compete with each other.

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