TiVo Founder to Quit CEO Post
TiVo Inc. co-founder Michael Ramsay said Wednesday that he would give up his post as chief executive and remain chairman in an effort to better focus on company strategy. TiVo said it just started a search for his successor.
Ramsay has led TiVo, a maker of a digital video recorder that pauses and replays live television, since 1997. He provided no timetable for the change.
Alviso, Calif.-based TiVo has had losses for five consecutive years as it spent more on marketing and developed new features to win customers. The company’s shares have fallen 28% since Jan. 6, when DirecTV Group Inc., a partner in selling TiVo recorders, said it would offer its own DVR this year.
“TiVo has struggled over the past year, and the idea of bringing in new leadership may be well received,” said Frederick Moran, an analyst with Stanford Group Co. in Boca Raton, Fla. “It probably makes sense for him to bring in a partner.”
Shares of TiVo rose 3 cents to $4.23 on Nasdaq. The stock has lost 51% of its value in the last year.
“I believe it is a natural evolution of any company to have a transition of leadership as the company grows and matures,” Ramsay, 55, said in a statement. “The time is right for me, personally and professionally, to bring in an outstanding chief executive officer to lead the company so that I can focus on future strategy.”
Ramsay, who founded the company with Jim Barton, has been planning to step aside as CEO for a while, TiVo spokeswoman Kathryn Kelly said.
TiVo’s losses have widened in the last two quarters as the company has sought to reduce its dependence on the partnership with El Segundo-based DirecTV, the biggest U.S. satellite TV service. TiVo, which has 2.3 million subscribers, said it added about 419,000 customers in the third quarter and that DirecTV had provided 316,000 of them.
DirecTV said last week it would sell a recorder similar to TiVo’s by the middle of this year, casting doubt on its sales relationship with TiVo.
“You know, I’m OK with competition,” Ramsay said in an interview last week. “I believe strongly that we have a superior service. DirecTV’s approaching 2 million subscribers with TiVo already, and by all accounts they love the service.”
Robert Mercer, a spokesman for DirecTV, has said the companies will continue to sell DVRs together. In the future, DirecTV will place more emphasis on marketing its own product, he said.
“TiVo has been stating that their relationship with DirecTV is fine,” said April Horace, an analyst with Janco Partners Inc. in Greenwood Village, Colo. “DirecTV is clearly moving away from TiVo.”
TiVo is also being challenged by cable television companies, including Time Warner Inc. and Comcast Corp., which are offering DVRs to customers, raising investor concern about TiVo’s prospects, Horace said.
“Other companies have come up with competing products that are more robust and have better distribution,” she said.
TiVo said Nov. 22 that its third-quarter loss widened to $26.4 million. The company has also begun an advertising campaign to lure customers.
Without DirecTV service, TiVo sells recorders for as little as $99 after a rebate. The product requires signing up for a $12.95-a-month subscription service, which provides program schedules and information to help customers record shows.
Time Warner Cable sells a DVR that pauses and records TV shows for about $8.95 a month, according to its website. It requires subscription to digital cable TV service.
TiVo said last week at the Consumer Electronics Show that it would create a high-definition, digital cable-ready DVR.
