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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 10-K

Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

for the fiscal year ended January 31, 2004

Commission file number 000-27141

TIVO INC.

(Exact name of registrant as specified in its charter)

(408) 519-9100

(Registrant’s telephone number including area code)

Securities registered pursuant to Section 12(b) of the Act:

NONE

Securities registered pursuant to Section 12(g) of the Act:

COMMON STOCK, $.001 PAR VALUE PER SHARE

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes x    No ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendments to this Form 10-K.    x

Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2).    Yes x    No ¨

As of July 31, 2003, the aggregate market value of the voting stock held by non-affiliates of the registrant, based upon the closing sales price for the registrant’s common stock, as reported in the Nasdaq National Market System, was $481.6 million.

On April 1, 2004, the Registrant had 80,065,722 outstanding shares of common stock.

DOCUMENTS INCORPORATED BY REFERENCE

Parts of Registrant’s Proxy Statement for the Annual Meeting of Stockholders to be held on August 4, 2004 are incorporated by reference into Part III of this Annual Report on Form 10-K (The Report of the Compensation Committee, the Report of the Audit Committee and the Comparative Stock Performance graph of the Registrant’s Proxy Statement are expressly not incorporated by reference herein.)

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TIVO INC.

FORM 10-K

FOR THE FISCAL YEAR ENDED JANUARY 31, 2004

TABLE OF CONTENTS

^©2004 TiVo Inc. All Rights Reserved.

Except as the context otherwise requires, the terms “TiVo”, “Registrant”, “company”, “we”, “us”, or “our” as used herein are references to TiVo Inc. and its consolidated subsidiaries.

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PART I

General Development of Business

We are a leading provider of technology and services for digital video recorders, or DVRs, a rapidly growing consumer electronics category. Our subscription-based TiVo service improves home entertainment by providing consumers with an easy way to record, watch, and control television. The TiVo service also offers the television industry a platform for advertising, content delivery, and audience research. The TiVo service requires a TiVo-enabled DVR that is available for as low as $99. Many currently available TiVo-enabled DVRs are broadband-enabled and offer customers the ability to enjoy home entertainment services such as digital music and photos. As of January 31, 2004, there were over 1.3 million subscriptions to the TiVo service.

We currently derive revenues from three sources:

We continue to be subject to a number of risks, including the uncertainty of market acceptance of the TiVo service and future profitability; competition; the dependence on third parties for manufacturing, marketing, and sales support; the intellectual property claims against us; and our highly dependent relationship with DIRECTV. We conduct our operations through one reportable segment. We anticipate that our business will continue to be seasonal and we expect to generate a significant number of our annual new subscriptions during and immediately after the holiday shopping season. To date, we have incurred significant losses and have had substantial negative cash flow. During the fiscal year ended January 31, 2004, we had net losses of ($32.0) million. As of January 31, 2004, we had an accumulated deficit of ($577.3) million.

Industry Background

Subscription-Based Television Programming is Growing. According to the market research firm Nielsen Media Research, 108 million U.S. households owned at least one television at the beginning of 2004. As the reach and popularity of television has grown, so too has the amount of programming available to consumers. Multi-channel programming services can provide hundreds of channels of video content. Multi-channel programming continues to proliferate as service providers roll out more local programming options and deliver a host of new, niche-oriented channels.

DVR Services Significantly Enhance Television Viewing. In this new content-rich environment, DVRs offer a compelling value proposition to consumers by providing the means to effectively sort through, select from, and organize the growing volume of broadcast video content. According to IDC, there were an estimated 3.2 million U.S. households that owned DVRs at the end of 2003. IDC projects that worldwide unit shipments of DVR-enabled set-top boxes will climb to more than 28 million in 2008.

Our Solution

We have created a unique television-based entertainment service that supports virtually any analog cable, digital cable, satellite, or over-the-air programming source. The TiVo service, combined with a TiVo-enabled DVR, has many features that dramatically improve a consumer’s television viewing experience, including:

Advanced Software and Services that Automatically Find and Record Programs. The TiVo service can automatically record a consumer’s favorite shows, all season long, even if the schedule changes. It can skip reruns if desired. It includes a rich program guide that allows consumers to browse quickly and efficiently through a schedule of up to two weeks of available television programming. The TiVo service allows consumers to search for shows to record by subject, title, genre, actor, director, channel, or time of showing. Consumers can record and subsequently watch a single show, prioritize and record a customized line-up, or automatically record all episodes of a favorite

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show. Unlike with a VCR, consumers accomplish this without entering specialized codes, setting a timer, or using a videotape. Currently available TiVo-enabled DVRs can store up to 140 hours of television programming, significantly more than the eight-hour capacity of most VCRs.

Pause, Rewind, and Fast-forward Functionality. Using a TiVo-enabled DVR, consumers can pause, rewind, and fast-forward live television. Unlike with a VCR, consumers can playback a show from its beginning while it is in the middle of being recorded, and consumers can play back a previously recorded show while recording another show. TiVo-enabled DVRs constantly record a buffer of up to 30 minutes of programming, so consumers who turn on the TV in the middle of an interesting program can often replay it from the beginning.

Personalization and Suggestions. The TiVo service allows consumers to create preferences for recording of particular shows or categories of interest. Using the “Thumbs Up”^™ and “Thumbs Down”^™ buttons on the TiVo remote control, consumers can express their preferences for shows. Based on the consumer’s stored individual preferences, the TiVo service recommends programming that the consumer is likely to enjoy. When storage space is available, the TiVo service automatically records the suggested programming.

Specialized Content and Innovative Advertising. We distribute video content designed to entertain consumers while providing a promotional vehicle for our advertising and promotion customers. For example, movie studios pay us to deliver previews of upcoming films, consumer product companies pay us to market their products, and television networks pay us to promote upcoming programs. In the future, content providers could use the TiVo service to offer consumers special programming and pay-per-view packages such as movies, sporting events, and television shows.

Our Strategy

Our goal is to generate significant recurring revenues through the deployment of our technology to television households worldwide. The key elements of our strategy are:

Offer an Increasingly Valuable Service to Attract New Subscribers. Our goal is to lead the market with innovations that expand the value and potential of TiVo’s subscription services. We plan to continue to make TiVo an increasingly compelling home entertainment service for both current and potential customers. For example, in April 2003, we launched a package of networked features that allow consumers to enjoy video and photos on their televisions and music through their home stereos. We intend to deliver a new service release during the fiscal year ending January 31, 2005, called “TiVoToGo”^™. This feature will enable users to move their favorite programs stored on a TiVo-enabled DVR to a laptop for viewing on the road, or to any PC.

Increase Average Revenue Per User by Selling Advertising and Audience Measurement Services. As our subscription base has grown, we have been able to offer robust advertising and audience measurement capabilities to programmers and advertisers. We plan to continue developing and enhancing these offerings, which take advantage of the unique capabilities of the TiVo service. For example, we have recently completed promotional and audience measurement work for Universal Pictures, General Motors, American Honda Motor Corp., Nissan Motor Corp. and the Coca Cola Company. In February 2004, we announced that we had signed an agreement with Nielsen Media Research to deliver information on DVR usage to the television industry.

Build a High Volume Subscriber Acquisition Channel Through Arrangements with Service Providers. We are pursuing relationships with satellite and cable operators to embed the TiVo service into their offerings. Our relationship with DIRECTV is the first of these arrangements. We believe this strategy will be successful because of the unique abilities of TiVo’s technology and services to reduce subscriber churn, increase revenue from TiVo-enabled DVR services, increase buy rates for programming packages and pay-per-view content, and attract new subscribers.

Integrate Our Technology to Accelerate Platform Deployment. Our strategy focuses on creating, developing, and deploying DVR standards in order to promote mass deployment of devices capable of running the TiVo service. We work with leading consumer electronics manufacturers to introduce products that incorporate our technology, including DVD players and recorders, satellite television receivers, and standalone DVRs. Consumers will be able to choose from over a dozen TiVo-enabled products from industry leaders including Pioneer, Toshiba, DIRECTV, Hughes, Humax, Philips, RCA, and Samsung this year.

Drive Down the Manufacturing Cost of a TiVo-Enabled DVR. We believe that the high cost of DVR hardware has been an obstacle to mass adoption. As a result, we have made cost reduction a major focus of our engineering and development efforts. We believe these efforts will lead to a reduction in the average retail price of DVRs for consumers and serve as an important catalyst for subscription growth.

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Extend and Protect Our Intellectual Property. The value of the TiVo service is derived largely from the technology we have developed. Our intellectual property has allowed us to become a leading service provider in the category and is the fundamental reason that many of our customers and consumer electronics manufacturers choose us. We intend to continue to design, develop, and implement innovative technology solutions that leverage and enhance the TiVo service offering. We have adopted a proactive patent and trademark strategy designed to protect and extend our technology and intellectual property.

Promote and Leverage the TiVo Brand. We believe the strength of the TiVo brand is an advantage in attracting subscribers, consumer electronics manufacturers, advertisers, and other customers. In the past, we have dedicated substantial resources to promoting our brand through multiple advertising and marketing channels, participation in trade shows, sponsoring events, merchandising, and by leveraging strategic relationships. We believe the TiVo brand is strongly established within the DVR category.

Invest in Subscription Growth. For the fiscal year ending January 31, 2005, we plan to increase significantly our investment in subscription acquisition activities with a focus on growing TiVo Service subscriptions. We anticipate the majority of this investment will be in connection with the 2004 holiday shopping season. We believe this investment can create incremental revenue, profits, and cash flow and put us on a long-term growth trajectory towards creating sustainable profitability.

Our Technology

The TiVo service relies on three key components: the TiVo client software platform, the TiVo service infrastructure, and the TiVo-enabled DVR hardware design. Each of these components serves a vital function in the TiVo service.

TiVo Client Software. The TiVo client software runs on TiVo-enabled DVRs. It consists of all operational software required for a TiVo-enabled DVR to deliver the TiVo service properly and reliably. TiVo client software is based on the open-source Linux operating system, but the bulk of the software is proprietary to TiVo. The software includes system components such as a media-oriented file system, a high-performance transactional database, an integrated security system, and application components such as media management, and user interface. We have enhanced the client software to support multiple services and applications, such as digital music and photos. The TiVo client software manages interaction with the TiVo service infrastructure. After the initial set-up of the TiVo service, the TiVo-enabled DVR will automatically connect to the TiVo service infrastructure over a dial-up or broadband connection to download the program guide data, client software upgrades, Showcases, and other content.

TiVo Service Infrastructure. The TiVo service infrastructure enables the ongoing operation of the TiVo service, managing the distribution of proprietary services and specialized content such as program guide data, Showcases, and TiVo client software upgrades. It interfaces with our billing and customer support systems for service authorization and bug tracking. In addition, the TiVo service infrastructure collects anonymous viewing behavior data uploaded from TiVo-enabled DVRs for use in our audience measurement efforts. We believe the TiVo service infrastructure technology is scalable, robust, and reliable. The infrastructure has also been designed to take advantage of the networks of service provider customers, for example, by utilizing DIRECTV’s satellite bandwidth to deliver data to DIRECTV receivers with TiVo service. The TiVo service infrastructure is extensible to support future initiatives such as e-commerce and lead generation, and authorization and billing for premium services.

DVR Hardware Design. The TiVo-enabled DVR hardware design is a specification developed by us for set-top boxes containing a hard disk drive, a CPU and memory, MPEG-2 digital video chips, a modem, and other components. We license this technology to consumer electronics manufacturers for them to modify and use in the production of DVRs that enable the TiVo service. We also provide the design to the contract manufacturer that produces TiVo-branded DVRs. The DVR hardware design has been integrated into a variety of products including DVD players, DVD recorders, DIRECTV receivers, and TiVo service DVRs. The DVR hardware design includes a modular front-end that allows the basic platform to be used for digital and analog broadcast, digital and analog cable, and satellite applications. In addition, the design includes USB ports to allow connection to broadband networks and external devices to enable future services.

Significant Relationships

DIRECTV. DIRECTV is the largest provider of satellite television in the U.S. We have had a longstanding relationship with DIRECTV in which DIRECTV assists us in marketing and delivering the TiVo service to its customer base. This relationship began in 1999 and was expanded in September of 2000 with the release of the first integrated DIRECTV DVR with TiVo. As of January 31, 2004, we had acquired approximately 676,000 subscriptions through this relationship. Currently, one of DIRECTV’s officers is a member of our Board of Directors.

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From 1999 thru October of 2002, we incurred upfront acquisition costs, recognized monthly recurring per subscriber revenues in a range from $4.15 to $9.95, and incurred recurring service costs for these subscribers. We agreed to pay DIRECTV a share of the revenues we collect from TiVo service subscriptions with standalone DVRs who subscribe to the DIRECTV service prior to June 30, 2003.

During 2002, we modified our agreements with the goal of giving DIRECTV the ability and economic incentive to drive volume growth. Under our new agreement, DIRECTV pays us a recurring monthly per-household fee for access to the technology needed to offer its customers the TiVo service. We incur limited recurring expenses and, on a marginal basis, limited or no acquisition costs for these subscriptions.

In January 2004, the average DIRECTV revenue per subscription, excluding advertising and audience research revenues, was approximately $1.62. We expect the average monthly subscription revenue per DIRECTV subscription to decline in the future as the mix of DIRECTV subscriptions shifts to the rapidly growing number of additions of new DIRECTV subscriptions, which involve no acquisition costs, lower recurring expenses, and lower subscription fees.

Our current agreement with DIRECTV does not expire until February 2007. Afterwards, while DIRECTV will have the option to continue to service the existing DIRECTV receivers with TiVo without further payment to us, it will not be able to add new DIRECTV receivers with TiVo unless DIRECTV elects to either purchase a royalty-bearing technology license from us or renew or replace our current agreement.

We also recognize revenue from DIRECTV for engineering professional services work on integrated DIRECTV satellite receivers with TiVo service and the related service infrastructure. We are currently providing DIRECTV with engineering professional services related to a new integrated DIRECTV satellite receiver with TiVo service that supports high definition television service, as well as engineering professional services related to hardware and service cost improvements and feature enhancements for existing platforms and customers.

Hardware Manufacturers. Several companies, including Toshiba, Pioneer, Sony, Philips, Thomson Multimedia, and Hughes, have manufactured and distributed TiVo-enabled DVRs. Each manufacturer is responsible for the manufacturing and distribution of its branded DVRs. We are solely responsible for the activation of the TiVo service on a manufacturer’s DVR if the purchaser of the DVR decides to purchase a subscription to the TiVo service. A TiVo-enabled DVR without a subscription to the TiVo service has minimal functionality and can be used to pause, rewind, and fast-forward through live or recorded shows.

We also engage a contract manufacturer to build TiVo-enabled DVRs. We distribute the TiVo-enabled DVRs, selling them both directly to consumers and to major retailers who offer these products to consumers. The table below shows the breakdown of DVRs compatible with the TiVo service that were manufactured during the fiscal years ended January 31, 2004, 2003, and 2002.

Sales and Marketing

The TiVo Service. We market the TiVo service in two ways. First, we sell directly to consumers who have purchased a TiVo-enabled DVR. We sell the TiVo service either for a monthly subscription rate of $12.95, or for a single payment of $299 for the lifetime of the DVR. Second, we market our service through our relationship with DIRECTV. DIRECTV pays us a per-household monthly fee for the ability to offer our service to their customers. DIRECTV makes all pricing decisions regarding the service it sells to its own customer base.

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Digital Video Recorders. To use the TiVo service, consumers first purchase a TiVo-enabled DVR and then activate the TiVo service. Currently, TiVo-enabled DVRs are available from major retailers across the United States, including Best Buy, Circuit City, Amazon.com, Tweeter, and The Good Guys. During the fiscal year ended January 31, 2004, approximately 80% of DVRs manufactured under contract to TiVo were sold to retail stores and approximately 20% were sold directly from our website.

We recognize revenues from the sale of TiVo-branded DVRs manufactured for us. To drive sales while managing costs, we have shared marketing expenses with key retailers, and in some cases, we have offered to share a portion of the subscription revenues.

Other Revenue Streams. We also receive revenues from promotions and audience research. We market these services both through a dedicated team of salespeople and through partnerships with companies like Nielsen Media Research.

Research and Product Development

Our research and development efforts are focused on designing and developing the components necessary to enable the TiVo service. These activities included both hardware and software development.

Although our total company employee headcount increased by approximately 19%, we increased the number of our regular, temporary and part-time employees engaged in research and development by 33% from a total of 160 to 212 as of January 2004 compared to January 2003.

Competition

We believe that the principal competitive factors in the DVR market are brand recognition and awareness, functionality, ease of use, availability, and pricing. We currently see two primary categories of DVR competitors: DVRs offered by consumer electronics companies, and DVRs offered by cable and satellite operators.

Within each of these two categories, the competition can be further segmented into those offering what we define as basic DVR functionality, and those offering enhanced DVR functionality. Basic DVR functionality includes no or limited program guide data and “VCR-like” controls with manual timeslot-based recordings, usually with no DVR service fee after the consumer purchases the enabling hardware. The TiVo Basic service is an example of basic DVR functionality. Enhanced DVR functionality includes rich program guide data and enhanced scheduling and personalization features, and may or may not require a DVR service fee. The TiVo service is an example of enhanced DVR functionality.

Consumer Electronics Competitors. We compete against several types of products with basic or enhanced DVR functionality offered by consumer electronics companies. These products record an analog television signal output from a cable or satellite set-top box, analog cable feed, or antenna.

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Satellite and Cable DVR Competitors. The DIRECTV satellite receiver with TiVo service competes against other cable and satellite set-top boxes that integrate basic or enhanced DVR functionality into multi-channel receivers.

Licensing Fees. Our licensing revenues depend both upon our ability to successfully negotiate licensing agreements with our consumer electronics and service provider customers and, in turn, upon our customers’ successful commercialization of their underlying products. In addition, we face competition from companies such as Microsoft, OpenTV, NDS, D&M Holdings, Digeo, Ucentric, and Gotuit who have created competing digital video recording technologies. Such companies may offer more economically attractive licensing agreements to service providers and manufacturers of DVRs. Going forward, in our relationships with manufacturers and distributors, we are shifting focus from upfront license and engineering professional services payments to recurring royalty and service payments. We expect future technology revenues to decline from the fiscal years 2004 and 2003 levels as we complete existing contracts.

Established competition for advertising budgets. Digital video recorder services, in general, and TiVo, specifically, also compete with traditional advertising media such as print, radio, and television for a share of advertisers’ total advertising budgets. If advertisers do not perceive digital video recording services, in general, and TiVo specifically, as an effective advertising medium, they may be reluctant to devote a significant portion of their advertising budget to promotions on the TiVo service. In addition, advertisers may not support or embrace the TiVo technology due to a belief that our technology’s ability to fast-forward through commercials will reduce the effectiveness of general television advertising.

Patents and Intellectual Property

We have filed patent applications covering many critical aspects of the design, functionality, and operation of a TiVo digital video recorder. We have been awarded 61 foreign and domestic patents, have 60 foreign and domestic patent applications pending, and have one provisional patent application pending. We have also filed patent applications that cover technology we intend to incorporate in future versions of the TiVo service and hardware. Patents we hold the rights to include:

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Several of our early patent applications have been examined and claims allowed by the U.S. Patent and Trademark Office. In addition, certain of our patents have been examined and approved under the terms of the Patent Convention Treaty, which provides for nominal acceptance of the patent in countries that are signatories to the treaty, which includes most countries in the world. We are currently filing for acceptance in key countries around the world.

We have secured U.S. registrations for the marks “TiVo,” the TiVo Logo, TiVo Smile Design, “TiVo Central,” “Can’t Miss TV,” “Ipreview,” “TiVoMatic,” “TV Your Way,” “What you want, when you want it,” “TiVolution,” and the Jump Logo. We have filed many other trademark applications covering substantially all of our trade dress, logos, and slogans, including: “Active Preview,” “DIRECTIVO,” “Overtime Scheduler,” “Personal TV,” “Primetime Anytime,” “Season Pass,” “See it, want it, get it,” “Thumbs Down” (logo and text), “Thumbs Up” (logo and text), “TiVo Series2” (logo and text), “Home Media Option,” “Wishlist,” and “Life is too short for bad TV.” These applications are currently pending with the U.S. Patent and Trademark Office. Additionally, we have international trademark applications pending for several of these trademarks. We have licensed the use of our name and logo to some of our customers and consumer electronics manufacturers.

We anticipate ongoing progress in our establishment of a defensible and useful intellectual property portfolio; however, there can be no assurance that current patent applications will ever be allowed or granted. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Factors that May Affect Future Operating Results – Our success depends on our ability to secure and protect patents, trademarks, and other proprietary rights” for additional information concerning our intellectual property.

Privacy Policy

We have adopted a privacy policy, which we make available on our website and deliver to each new subscriber to the TiVo service. This policy was last updated in August 2003 to cover new commerce features that we plan to introduce in the future. This policy explains that we collect certain types of information such as anonymous viewing and diagnostic information, but all viewing information that is linked or associated with an individual identity will not be disclosed without the viewer’s affirmative consent. We further give subscribers the ability to “opt-out” from the collection of anonymous viewing information and diagnostic information log files.

We have designed a system that ensures that any viewing information transmitted from our receiver is anonymous on the receiver and remains unidentifiable to a particular viewer (known as anonymous viewing information), unless that subscriber affirmatively consents to such identification before any viewing data leaves the receiver. Anonymous viewing information is collected separately from any information that identifies a viewer personally. As a result, unless subscribers affirmatively consent to the collection of personally identifiable viewing information before the file containing such viewing information is transmitted from the receiver to our distribution servers, we have no way of matching anonymous viewing information with particular subscribers. We may be able to use this anonymous information to tell a broadcast or advertising client the percentage of our viewers that recorded a particular program or advertisement, but we will not know, nor be able to tell the client, which of our viewers did so, unless a viewer decides to provide that information.

Employees

At April 1, 2004, we employed approximately 304 employees, including 34 in service operations, 180 in research and development, 30 in sales and marketing, and 60 in general and administration. We also employ, from time to time, a number of temporary and part-time employees as well as consultants on a contract basis. At April 1, 2004, we employed 61 such persons. Our future success will depend in part on our ability to attract, train, retain, and motivate highly qualified employees. We may not be successful in attracting and retaining such personnel. Our employees are not represented by a collective bargaining organization and we have never experienced a work stoppage or strike. Our management considers employee relations to be good.

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Executive Officers and Key Employees (as of April 1, 2004):

Michael Ramsay is a co-founder of TiVo and has served as TiVo’s Chairman of the Board of Directors and Chief Executive Officer since our inception in August 1997. From April 1996 to July 1997, Mr. Ramsay was the Senior Vice President of the Silicon Desktop Group for Silicon Graphics, a manufacturer of advanced graphics computers. From August 1994 to April 1996, Mr. Ramsay was President of Silicon Studio, Inc., a wholly owned subsidiary of Silicon Graphics, Inc. (“SGI”) focused on enabling applications development for emerging interactive media markets. From July 1991 to August 1994, Mr. Ramsay served as the Senior Vice President and General Manager of Silicon Graphics’ Visual Systems Group. Mr. Ramsay also held the positions of vice president and general manager for the Entry Systems Division of SGI. Prior to 1986, Mr. Ramsay held research & development and engineering management positions at Hewlett-Packard and Convergent Technologies. Additionally, Mr. Ramsay serves on the board of directors of Netflix, Inc., an online DVD rental service. Mr. Ramsay holds a B.S. degree in Electrical Engineering from the University of Edinburgh, Scotland.

Martin Yudkovitz joined TiVo in April 2003 as President. Prior to joining TiVo, Mr. Yudkovitz was an Executive Vice President of NBC since July 2000 and President of NBC Digital Media since November of 1995. Mr. Yudkovitz had a leading role in the development and launch of CNBC, NBC’s first entry into cable TV, MSNBC, NBC’s second cable TV venture, and MSNBC.com, an Internet news site. During his tenure, Mr. Yudkovitz also founded NBC Digital Media, and both created and supervised NBC’s extensive relationship with Microsoft, which resulted in the joint ventures of MSNBC.com, NBC.com and NBCSports.com, to name a few. Mr. Yudkovitz serves on the board of directors of A&E/The History Channel, as well as several other non-public corporate boards. He also serves as a member of the board of trustees of Rutgers University, as well as the boards of several other non-profit/charitable foundations. Mr. Yudkovitz holds a B.A. degree in Political Science from Rutgers University and a J.D. degree from Columbia University School of Law.

David H. Courtney joined TiVo in March 1999 as Chief Financial Officer and is currently Executive Vice President of Worldwide Operations and Administration, Chief Financial Officer, and a member of the board of directors. From May 1995 to July 1998, Mr. Courtney served as a Managing Director at J.P. Morgan, an investment bank, where he was

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responsible for building and expanding the firm’s high technology investment banking business in the United States. From 1986 to 1995, Mr. Courtney was a member of the high technology investment banking group at Goldman, Sachs & Co., most recently serving as Vice President. Mr. Courtney currently serves as a director of KQED Television, a non-profit affiliate of the Public Broadcasting System in San Francisco, California and serves on the board of directors of Silicon Image Inc., a semiconductor and system solutions company. Mr. Courtney holds a B.A. degree in Economics from Dartmouth College and an M.B.A. degree from the Stanford Business School.

Brodie Keast was named Executive Vice President of TiVo Service in March 2004. He had served as Senior Vice President, General Manager of TiVo service since November 2001. In December 1999, Mr. Keast joined TiVo as Vice President of Sales and Marketing. Prior to joining TiVo, Mr. Keast was employed with Quantum Corporation from 1996 through 1999 most recently serving as Vice President and General Manager for Quantum’s DLT Tape Division. Prior to joining Quantum, he spent ten years at Apple Computer where he held a number of executive marketing positions. Mr. Keast holds a B.S. degree in Computer Science from California State University, Chico.

James Barton is a co-founder of TiVo and has served as TiVo’s Vice President of Research and Development, Chief Technical Officer and Director since our inception to January 2004 and is currently Senior Vice President of Research and Development and Chief Technical Officer. From June 1996 to August 1997, Mr. Barton was President and Chief Executive Officer of Network Age Software, Inc., a company that he founded to develop software products targeted at managed electronic distribution. From November 1994 to May 1996, Mr. Barton served as Chief Technical Officer of Interactive Digital Solutions Company, a joint venture of Silicon Graphics and AT&T Network Systems created to develop interactive television systems. From June 1993 to November 1994, Mr. Barton served as Vice President and General Manager of the Media Systems Division of SGI. From January 1990 to May 1991, Mr. Barton served as Vice President and General Manager for the Systems Software Division of Silicon Graphics. Prior to joining SGI, Mr. Barton held technical and management positions with Hewlett-Packard and Bell Laboratories. Mr. Barton holds a B.S. degree in Electrical Engineering and an M.S. degree in Computer Science from the University of Colorado at Boulder.

Ta-Wei Chien has served as Senior Vice President and General Manager of TiVo Technology and Licensing Business since November 2001. Previously, Mr. Chien served as TiVo’s Vice President of Engineering and Operations from February 1998. From December 1996 to February 1998, Mr. Chien served as Vice President of Engineering in the Desktop Workstations group at SGI, where he managed engineering projects for desktop workstations. From April 1991 to December 1996, Mr. Chien was a director of digital media and VLSI engineering at SGI. Mr. Chien holds a B.S. degree in Electrical Engineering from National Taiwan University and an M.S. degree in Electrical Engineering from the University of California, Los Angeles.

Mark A. Roberts was named Senior Vice President of Engineering in December 2002. He had served as Chief Information Officer of TiVo since March 1999 and Vice President of Information Technology since July 1999. Prior to joining TiVo, he served as Vice President of Information Technology at Acuson Corporation, a medical ultrasound company, from March 1996 to March 1999. From July 1990 to March 1996, Mr. Roberts was Director of Information Systems at SGI. Mr. Roberts holds a B.S. degree in Economics from Santa Clara University.

Susan Cashen was named Vice President of Marketing in February 2003. She joined TiVo in March 2000 as Vice President of Corporate Communications. From November 1994 to March 2000, Ms. Cashen was employed at Blanc & Otus, a leading technology public relations firm based in San Francisco, California and most recently served as Senior Vice President and Partner from March 1999 to March 2000. Prior to joining Blanc & Otus, Ms. Cashen managed her own consulting practice. Ms. Cashen holds a B.A. degree in Russian Studies from Hamilton College.

Andrew Cresci was named Vice President of New Business Development in September 2002. Prior to that, has served as Vice President and General Manager of TiVo (UK) since November 2000. In August 1999, Mr. Cresci co-founded TapCast, a California based wireless Internet portal. Prior to founding TapCast Mr. Cresci was Director of Worldwide Marketing for the workstation division at SGI for eight years. Mr. Cresci holds a B.S. degree in Electronics Engineering from the University of Bath, England.

Rob Currie joined TiVo as Vice President of Market Development in January 2004 as part of TiVo’s acquisition of Strangeberry, Inc. where he was CEO from December 2002 to January 2004. From October 2001 to November 2002, Mr. Currie was a co-founder and principle at Airgomo S.L., a Spanish wireless software consultancy. From August 1996 to January 2000, Mr. Currie was Vice President of Engineering at Marimba Inc., an Internet infrastructure software company. Mr. Currie holds a B.S, degree in Electrical Engineering and Computer Science from the University of California at Berkeley and an M.B.A. degree from the University of Chicago.

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Ken Kershner joined TiVo in July 2000 and is currently Vice President, Service Engineering. Previously he served as Engineering VP at TenTV.com, a streaming media educational services firm. From March 1991 to August 1999, Mr. Kershner held engineering and program management positions at SGI focused on digital media and web applications. Prior to SGI, Mr. Kershner worked at Hewlett Packard and Texas Instruments. Mr. Kershner holds a B.S. degree in Electrical Engineering from Duke University and an M.B.A. degree from M.I.T.’s Sloan School.

Luther Kitahata has served as Vice President of Software Engineering since October 2000. He joined TiVo in 1998 as the Director of Software. Prior to joining TiVo, Mr. Kitahata was part of the founding team at Navio Communications (now Liberate Technologies) where he worked in both managerial and engineering capacities from April of 1996 to January 1998. Prior to 1996, Mr. Kitahata was founder and Director of Engineering of E-Motion, a leading provider of content distribution and multimedia collaboration systems. Mr. Kitahata holds an M.S. degree and a B.A. degree with honors in Computer Science from Brown University.

Jeff Klugman has served as Vice President of Platform Business since December 2001. Prior to joining TiVo, Mr. Klugman was CEO of PointsBeyond.com, an internet-portal start-up focused on outdoor activities and adventures. In 1999, Mr. Klugman was Vice President of Marketing and Business Development for one of Quantum’s business units. Mr. Klugman holds a B.S. degree in engineering from Carnegie Mellon University and an M.B.A. degree from the Stanford Business School.

Edward Lichty was named Vice President of Business Development in November 2002. Prior to joining TiVo in April 1998, Mr. Lichty was a member of the finance team at International Wireless Communications, a wireless service provider with operating companies in Latin America and Asia. Mr. Lichty began his career in the investment banking group at Stephens Inc., a privately-held firm located in Little Rock, AR. Mr. Lichty received a B.A. degree in American Literature from Yale University and holds an M.B.A. degree from the Stanford Business School.

Howard Look has served as Vice President of Applications and User Experience in June 2003. He had served as Vice President of TiVo Studios since March 2000. He joined TiVo in February 1998 as Director of Application Software. Prior to joining TiVo, Mr. Look was Manager and the Director of Applied Engineering at SGI from 1996 to 1998. Mr. Look holds a B.S degree in Computer Engineering from Carnegie-Mellon University.

Joe Miller has served as Vice President of Sales since October 2000. From June 1999 to October 2000, Mr. Miller served as Director of Channel Marketing for TiVo. Prior to joining TiVo, Mr. Miller was employed with U.S. Satellite Broadcasting from 1994 to 1999, most recently serving as General Manager of Retail Sales. Prior to joining U.S. Satellite Broadcasting, Mr. Miller was National Sales Manager for Cox Satellite Programming. Mr. Miller holds a B.A. degree in Public Relations from Southwest Texas State University.

Laura Schulte joined TiVo as Vice President of Human Resources in July 2002. Prior to TiVo, Ms. Schulte served as Vice President of Human Resources for Blue Pumpkin Software. Ms. Schulte also worked as Vice President of Human Resources for Netigy Corporation and prior to that, held numerous positions within the Human Resources department at Western Digital Corporation, where she was responsible for the management of all HR activities. Ms. Schulte holds a B.A. degree in Psychology from UC Irvine.

Stuart West has served as Vice President of Finance since November 2002. Prior to joining TiVo in December 2000, Mr. West was a business development executive at venture-backed Silicon Valley software and service startups. Prior to that, Mr. West was a Vice President at J. P. Morgan, where he managed mergers, IPO’s, and other financings for technology companies. Mr. West’s other work experience includes Texas Instruments, the U.S. State Department, and the White House. He holds a B.A. in History from Yale University and completed the Stanford Business School’s Executive Program for Growing Companies.

Matthew Zinn has served as Vice President, General Counsel, and Chief Privacy Officer since July 2000 and as Corporate Secretary since November 2003. From May 1998 to July 2000, Mr. Zinn was the Senior Attorney, Broadband Law and Policy for the MediaOne Group, a leading global communications company. From August 1995 to May 1998, Mr. Zinn served as corporate counsel for Continental Cablevision, the third largest cable television operator in the United States. From November 1993 to August 1995, he was an associate with the Washington, D.C., law firm of Cole, Raywid & Braverman, where he represented cable operators in federal, state, and local matters. Mr. Zinn holds a B.A. degree in Political Science from the University of Vermont and holds a J.D. degree from the George Washington University National Law Center

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Other Information

TiVo was incorporated in August 1997 as a Delaware corporation and is located in Alviso, California. In August of 2000, we formed a wholly owned subsidiary, TiVo (UK) Ltd., in the United Kingdom. In October of 2001, we formed a subsidiary, TiVo International, Inc., a Delaware corporation. On January 12, 2004, we acquired Strangeberry, Inc., a small Palo Alto based technology company specializing in using home network and broadband technologies to create new entertainment experiences on television.

We maintain an Internet website at the following address: www.tivo.com. The information on our website is not incorporated by reference in this annual report on Form 10-K.

We make available on or through our website certain reports and amendments to those reports that we file with or furnish to the Securities and Exchange Commission (the “SEC”) in accordance with the Securities Exchange Act of 1934 (the “Securities Exchange Act”). These include our annual reports on Form 10-K, our quarterly reports on Form 10-Q, and our current reports on Form 8-K. We make this information available on or through our website free of charge as soon as reasonably practicable after we electronically file the information with, or furnish it to, the SEC.

Properties

Our corporate headquarters, which houses our administrative, sales and marketing, customer service and product development activities, is located in Alviso, California, under a lease that expires in March 2007. We believe that our corporate facilities will be adequate to meet our office space needs for the next several years as we currently utilize approximately 85% of the total office space. Our facilities lease obligations are subject to periodic increases and we believe that our existing facilities are well maintained and in good operating condition.

Additionally, we currently lease international office space in Berkshire, United Kingdom under a lease that expires in March 2006. We have vacated this facility and no longer maintain an office in the United Kingdom.

EchoStar Communications Litigation. On January 5, 2004, we filed a complaint against EchoStar Communications Corporation in the U.S. District Court for the Eastern District of Texas alleging willful and deliberate infringement of U.S. Patent No. 6,233,389, entitled “Multimedia Time Warping System.” On January 15, 2004, we amended our complaint to add EchoStar DBS Corporation, EchoStar Technologies Corporation, and Echosphere Limited Liability Corporation as additional defendants. We allege that we are the owner of this patent, and further allege that the defendants have willfully and deliberately infringed this patent by making, selling, offering to sell and/or selling digital video recording devices, digital video recording device software, and/or personal television services in the United States. On March 2, 2004, EchoStar filed its answer to TiVo’s complaint, moved to dismiss for lack of personal jurisdiction, and moved to transfer the case from the Eastern District of Texas to the Northern District of California. TiVo intends to oppose these motions. We seek unspecified monetary damages as well as an injunction against the defendants’ further infringement of the patent. We could incur material expenses in this litigation.

Indemnification of Sony Corporation Against Command Audio Corporation Lawsuit. On February 5, 2002, Sony Corporation notified us that Command Audio Corporation had filed a complaint against Sony Electronics, Inc. on February 2, 2002 in the U.S. District Court for the Northern District of California. The complaint alleges that, in connection with its sale of digital video recorders and other products, Sony infringes upon two patents owned by Command Audio (U.S. Patent Nos. 5,590,195 (“Information Dissemination Using Various Transmission Modes”) and 6,330,334 (“Method and System for Information Dissemination Using Television Signals”). The complaint seeks injunctive relief, compensatory and treble damages and Command Audio’s costs and expenses, including reasonable attorneys’ fees. Under the terms of our agreement with Sony governing the

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distribution of certain DVRs that enable the TiVo service, we are required to indemnify Sony against any and all claims, damages, liabilities, costs, and expenses relating to claims that our technology infringes upon intellectual property rights owned by third parties. We believe Sony has meritorious defenses against this lawsuit; however, due to our indemnification obligations, we are incurring material expenses in connection with this litigation. If Sony were to lose this lawsuit, our business could be harmed.

Pause Technology LLC. On September 25, 2001, Pause Technology filed a complaint against us in the U.S. District Court for the District of Massachusetts alleging infringement of U.S. Reissue Patent No. 36,801, entitled “Time Delayed Digital Video System Using Concurrent Recording and Playback.” Pause Technology alleges that it is the owner of this patent, and further alleges that we have willfully and deliberately infringed this patent by making, selling, offering to sell, and using within the United States the TiVo digital video recorder. Pause Technology seeks unspecified monetary damages as well as an injunction against our operations. It also seeks attorneys’ fees and costs. On February 6, 2004, we obtained a favorable summary judgment ruling in the case filed against us in 2001 by Pause Technology LLC in the United States District Court for the District of Massachusetts. The court ruled that our software versions 2.0 and above do not infringe Pause’s patent, and accordingly has ordered that judgment be entered in our favor. On March 3, 2004, Pause Technology filed a notice of appeal to the United States Court of Appeal for the Federal Circuit, appealing the February 6, 2004 summary judgment ruling in favor of TiVo.

IPO Litigation. We and certain of our officers and directors are named as defendants in a consolidated securities class action lawsuit filed in the U.S. District Court for the Southern District of New York. This action, which is captioned Wercberger v. TiVo et al., also names several of the underwriters involved in our initial public offering as defendants. This class action is brought on behalf of a purported class of purchasers of our common stock from September 30, 1999, the time of our initial public offering, through December 6, 2000. The central allegation in this action is that our IPO underwriters solicited and received undisclosed commissions from, and entered into undisclosed arrangements with, certain investors who purchased our common stock in our IPO and in the after-market. The complaint also alleges that the TiVo defendants violated the federal securities laws by failing to disclose in our IPO prospectus that the underwriters had engaged in these allegedly undisclosed arrangements. More than 150 issuers have been named in similar lawsuits. In July 2002, an omnibus motion to dismiss all complaints against issuers and individual defendants affiliated with issuers (including the TiVo defendants) was filed by the entire group of issuer defendants in these similar actions. On October 8, 2002, our officers were dismissed as defendants in the lawsuit. On February 19, 2003, the court in this action issued its decision on defendants’ omnibus motion to dismiss. This decision dismissed the Section 10(b) claim as to TiVo but denied the motion to dismiss the Section 11 claim as to TiVo and virtually all of the other issuer-defendants.

On June 26, 2003, the plaintiffs announced a proposed settlement with us and the other issuer defendants. The proposed settlement provides that the insurers of all settling issuers will guarantee that the plaintiffs recover $1 billion from non-settling defendants, including the investment banks who acted as underwriters in those offerings. In the event that the plaintiffs do not recover $1 billion, the insurers for the settling issuers will make up the difference. Under the proposed settlement, the maximum amount that could be charged to our insurance policy in the event that the plaintiffs recovered nothing from the investment banks would be approximately $3.9 million. We believe that we have sufficient insurance coverage to cover the maximum amount that we may be responsible for under the proposed settlement. Our board of directors approved the proposed settlement at a meeting held on June 25, 2003. It is possible that the parties may not reach agreement on the final settlement documents or that the Federal District Court may not approve the settlement in whole or part. In the event that the parties do not reach agreement on the final settlement, we believe we have meritorious defenses and intend to defend this action vigorously; however, we could be forced to incur material expenses in the litigation, and in the event there is an adverse outcome, our business could be harmed.

No matters were submitted to a vote of security holders during the quarter ended January 31, 2004.

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PART II

Market Information for Common Equity

Our common stock has traded on the Nasdaq National Market under the symbol “TIVO” since September 30, 1999. Prior to that time, there was no public trading market for our common stock. As of April 1, 2004, we had 807 stockholders of record.

The following table sets forth, for the periods indicated, the high and low sales prices of our common stock as reported by the Nasdaq National Market, on any trading day during the respective period:

On April 1, 2004, the closing price of our common stock was $9.15 per share.

Dividend Policy

We paid no cash dividends during the fiscal year ended January 31, 2004 and we expect to continue our current policy of paying no cash dividends to holders of our common stock for the foreseeable future.

Recent Sales of Unregistered Securities

Strangeberry Merger. On January 12, 2004 we acquired Strangeberry Inc. (“Strangeberry”), a small Palo Alto based technology company specializing in using home network and broadband technologies to create new entertainment experiences on television. Strangeberry has created technology, based on industry standards and including a collection of protocols and tools, designed to enable the development of new broadband-based content delivery services. Pursuant to an agreement and plan of merger with Strangeberry Inc. and certain stockholders of Strangeberry, we issued 216,760 shares of TiVo common stock, par value $.001 per share, in exchange for all of the issued and outstanding capital stock of Strangeberry and we issued 108,382 shares of restricted stock to four key employees of Strangeberry, in a private placement exempt from registration pursuant to Section 4(2) of the Securities Act of 1933, as amended, and Rule 506 of Regulation D under the Securities Act.

A total of eight former common and preferred stockholders of Strangeberry received shares of our common stock in connection with the merger, including the four key employees, each of whom represented to us that they were “accredited investors” within the meaning of Rule 501 of Regulation D and/or had such knowledge and experience in financial and business matters that they were capable of evaluating the merits and risks of the investment in our common stock as required by Rule 506 of Regulation D. The stockholders also represented to us that they were acquiring the shares of common stock for their own account and not with a view to distribution or other disposition in violation of the Securities Act. The shares of common stock were issued with restrictive legends permitting transfer only upon registration or an exemption under the Securities Act and applicable state securities laws.

To enable the resale of these shares by these stockholders, we filed a registration statement on Form S-3 (File No. 333-112836) on February 13, 2004, as amended on March 12, 2004. The registration statement was declared effective by the Securities and Exchange Commission on March 15, 2004.

Conversion of Notes. On January 16, 2004, we issued 2,506,265 shares of our common stock to a related party noteholder upon conversion of $10,000,000 aggregate principal amount of our 7% Convertible Senior Notes due 2007 at the then current conversion price of $3.99 per share. The issuance of these shares of common stock was exempt from registration pursuant to Section 3(a)(9) of the Securities Act.

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The following selected financial data as of and for the fiscal years ended January 31, 2004, 2003, and 2002, respectively, have been derived from our consolidated financial statements audited by KPMG LLP, independent auditors. Additionally, the following selected financial data as of and for the one-month transition period ended January 31, 2001 and calendar years ended December 31, 2000 and 1999 have been derived from our consolidated financial statements audited by Arthur Andersen LLP, independent auditors. These historical results are not necessarily indicative of the results of operations to be expected for any future period.

The data set forth below (in thousands, except per share data) should be read in conjunction with Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements included in Item 8. “Financial Statements and Supplementary Data.”

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Quarterly Results of Operations

The following table represents certain unaudited statement of operations data for our eight most recent quarters ended January 31, 2004. In management’s opinion, this unaudited information has been prepared on the same basis as the audited annual financial statements and includes all adjustments, consisting only of normal recurring adjustments, necessary for a fair representation of the unaudited information for the quarters presented. This information should be read in conjunction with our audited consolidated financial statements, including the notes thereto, included elsewhere in this Annual Report. The results of operations for any quarter are not necessarily indicative of results that may be expected for any future period. Prior quarters have been reclassified in order to conform to current quarter classifications.

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You should read the following discussion and analysis in conjunction with the consolidated financial statements and the notes included elsewhere in this Annual Report and the section “Factors That May Affect Future Operating Results” at the end of this Item 7, as well as other cautionary statements and risks described elsewhere in this Report, before deciding to purchase, sell or hold our common stock.

Overview

We are a leading provider of technology and services for digital video recorders, or DVRs, a rapidly growing consumer electronics category. Our subscription-based TiVo service improves home entertainment by providing consumers with an easy way to record, watch, and control television. The TiVo service also offers the television industry a platform for advertisers, content delivery, and audience research. Key elements of our strategy revolve around continued investment in technology, research and development and innovation; partnering with service providers; extending and protecting our intellectual property and continuing to promote and leverage the TiVo brand; and working to improve profitability, market share, and financial strength. Our financial strength and ability to adapt to the current market and economic conditions are dependent in part on our generation of cash flow, effective management of working capital, funding commitments, and other obligations as well as the growth of our business.

Executive Overview and Outlook

During the fiscal year ended January 31, 2004, we achieved our two key objectives for the year, which were (i) growth in subscriptions and revenues and (ii) reduction in cash flow used in operations from the prior fiscal year. Our total installed subscription base more than doubled during the fiscal year. The quarterly subscription growth showed strong improvement. Subscription additions in the fourth quarter of the fiscal year 2004 were 330,000, which were more than the entire installed subscription base from two years ago. We also reduced our cash usage for the fiscal year 2004 by continuing to reduce our operating expenses. Additionally, we improved our cash balance significantly during the year by raising over $100 million in capital from the issuance of common stock, resulting in a year-end cash and cash equivalents balance of $143.2 million, our strongest position in 3 years. The achievement of these goals has put us in a strong financial position for the fiscal year 2005. For the fiscal year ending January 31, 2005 we plan to significantly increase our investment in subscription acquisition activities with a focus on growing TiVo Service subscriptions. We anticipate the majority of this investment will be in connection with the 2004 holiday shopping season. We believe this investment can create incremental revenue, profits, and cash flows and put us on a long-term growth trajectory towards creating sustainable profitability.

The following table sets forth selected information as of our fiscal year ended January 31, 2004, 2003, and 2002:

Net Revenues. Our net revenues increased $45.1 million during the fiscal year ended January 31, 2004 compared to the prior fiscal year. Approximately 60% of this growth was a result of increased hardware revenues due to increased volume of TiVo-enabled DVRs sold to retailers and consumers. The continued growth in our installed subscription base also contributed to the increase in our net revenues. We have added more than 1 million net new TiVo Service and DIRECTV subscriptions in the last three years.

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Cost of Revenues. The costs of our revenues increased by approximately 52% during the fiscal year 2004 primarily because of increased cost of hardware revenues. This cost increased over $30.2 million, or approximately 68%, compared to the prior fiscal year due to continued increases in our TiVo-enabled DVR manufacturing volume. Cost of service revenues for the fiscal year ended January 31, 2004 increased modestly compared to the prior fiscal year.

Operating Expenses. Over the last three years, our operating expenses have decreased primarily due to reductions in sales and marketing expenses. We expect operating expenses to increase due to the planned increased spending on subscriber acquisition activities.

Cash Flows from Operations. We expect cash flows from operations in the fiscal year 2005 to decline due to higher operating expenses attributable to our planned increased subscription acquisition activities.

Key Business Metrics

Management periodically reviews certain key business metrics in order to evaluate the effectiveness of our operational strategies, allocate resources, and maximize the financial performance of our business. These key business metrics include subscription growth and cash flows used in operations.

Subscription Growth

Management believes this metric provides an important leading indicator of revenue generation in future years. Management uses it to help evaluate the execution and performance of TiVo’s and DIRECTV’s marketing programs in acquiring new subscriptions and retaining existing subscriptions. We define a “Subscription” as a TiVo-enabled DVR for which (i) a customer has paid for the TiVo service and (ii) service is not canceled. DVRs with the TiVo Basic service that do not upgrade to the TiVo service are not included in our subscription totals. As of January 31, 2004, our total installed Subscription base was approximately 1,332,000, over twice the installed base as of January 31, 2003. Included in the 1,332,000 subscriptions are approximately 14,000 product lifetime subscriptions that had reached the end of the four-year period we use to recognize lifetime subscription revenues.

Below is a table that details the growth in our Subscription base during the past eight quarters. The TiVo Service line items refer to subscriptions sold to customers who have TiVo-enabled DVRs and products, including those manufactured by TiVo, Sony, Pioneer, Toshiba, Philips, and others. The DIRECTV line items refer to subscriptions sold to customers who have integrated DIRECTV satellite receivers with TiVo. Additionally, we provide a breakdown of the percent of TiVo Service Subscriptions for which consumers pay a recurring fee.

DIRECTV reports and pays us monthly subscription fees on a per-household basis. For households with multiple DVRs, we count each DVR as a Subscription. For the month of January 2004, DIRECTV paid us for approximately 576,000 households, which represented approximately 676,000 subscriptions. As a result, there were approximately 100,000 DIRECTV satellite receivers with TiVo for which we receive no additional payment from DIRECTV.

In January 2004, we recognized approximately $1.62 in average subscription revenue per DIRECTV subscription, excluding advertising and audience research revenues, compared to approximately $4.27 in January 2003. We expect the average monthly subscription revenue per DIRECTV subscription to decline in the future as the mix of DIRECTV subscriptions shifts to the rapidly growing number of additions of new DIRECTV subscriptions, which involve no acquisition costs, lower recurring expenses, and lower subscription fees.