TiVo's Slo-Mo Trip Toward Profitability

Sometimes becoming a staple of the American lexicon is easier than becoming a staple of the American living room. Just ask TiVo (TIVO). Over the past decade, the company's name has become the default verb to describe the act of digitally recording TV. Yet despite its strong brand recognition, TiVo has struggled to turn a profit. Last year it lost $84.5 million on $219.6 million of revenue. The deficit was nothing new: In 10 of the past 11 years, the Alviso (Calif.)-based company has racked up losses.

At the same time, TiVo's customer base has dwindled, from a high of 4.4 million users in 2007 to just over 2 million in January 2011. Part of the problem is that while lots of people say they TiVo their favorite TV shows, in reality, many use the cheaper digital video recorders (DVR) provided by their cable or satellite operator. "We got shunned by the operator community as a way to do DVRs," says TiVo Chief Executive Officer Thomas S. Rogers. "People went out and did their generic alternatives."