By Harry McCracken | Monday, November 15, 2010 at 6:04 pm
TiVo, the original personal TV box, is facing new competition from Apple TV, Roku, the Boxee Box, Logitech’s Google-based Revue, and other Johhnie-come-lately gizmos. Most of them cost less than TiVo, and none of them require a monthly fee. And the company is responding with a holiday offer–good through December 31st–that brings the price of a TiVo box from $299.99 down to $99.99, the same amount you’d pay for an Apple TV or Roku’s midrange version. It’s calling this an “instant savings” of $200. And there’s even an option to pay nothing up-front at all.
Except…it’s nowhere as simple as that. Actually, figuring out how much TiVo costs, and which version to buy, just got more confusing.
The company is now offering three purchase options for its standard Premiere box:
With any of the options, you’re locking into the monthly fee–either $12.95 or $19.99–for as long as you use the box.
So which deal is the best buy? That’s a surprisingly difficult question to answer. If you use the TiVo for two years, the free-box option is your cheapest choice (at a total of $479.76) and the $299.99 option is the costliest (at a total of $610.79). But if you use the TiVo for four years, the free box ends up costing you a total of $1059.51 and the $299.99 one costs only $921.59.
You could also choose to pay $99.99 for the box plus $19.99 a month–the deal which TiVo is promoting as the exciting limited-time holiday special. But this only makes sense if you use the TiVo for more than one year but less than two years. And if you don’t love the thing so much that you want to use it for at least two years, it doesn’t make sense to buy it in the first place. Spend your $99 on an Apple TV or a Roku instead, and skip the monthly fees.
(If you fail to complete your contract, you’ll pay an early-termination fee–I’m not even going to try to do the math on that.)
Then there’s the option to pay $299.99 for the box and a flat rate of $399 for service for the life of the box. A TiVo representative told me that this offer is no longer available to new buyers, and it’s no longer prominent on TiVo’s site, but it’s still mentioned here, on a page that was updated yesterday. If it is still a possibility, it’s the smartest economic decision as long as you use the TiVo for at least two years and seven months.
TiVo’s explanation of the pricing plans talks about the device being yours to keep with no obligation once you’ve completed the contract, but the box turns into a doorstop the moment you stop paying the monthly fee. And while all this sounds a bit like the hoops you’ll jump through when you buy a cell phone, there’s one difference: Cell-phone companies generally don’t charge you more for service when you get the phone for cheap. With TiVo, the “instant savings” aren’t really long-term savings–you start paying them back the moment you use the service, in the form of a 55 percent higher monthly service charge than if you’d paid a higher price for the hardware.
TiVo has a history of changing its pricing structure every so often: Here’s a 2006 USA Today story about an earlier move to multiple options with varying hardware and service costs.
I’ve been a happy TiVo owner for years. I recommend TiVo frequently. In some ways it’s better than the new, more Internet-centric competition, and I want to see it do well. But the confusing structure of its pricing options and the questionable value of the $99.99 deal makes me unhappy. Adding complexity to the buying process won’t help TiVo keep up with the times; it might even scare consumers off, or lead them to make purchase decisions they’ll later regret.
Suggestion for TiVo: How about adding “Your total cost” details for the various options to make buying a little less baffling–and refraining from using the phrase “instant savings,” since it’s just plain misleading?