Mike Ramsay, co-founder of digital video recording pioneer TiVo, is stepping down as chief executive as the company reshapes itself and struggles to fend off stiffening competition...
SAN JOSE, Calif. — Mike Ramsay, co-founder of digital video recording pioneer TiVo, is stepping down as chief executive as the company reshapes itself and struggles to fend off stiffening competition.
Ramsay, 55, said yesterday he will remain as the board chairman but will give up the helm he held for eight years after a successor is found.
The announcement comes one week after the company had shining and dampening moments.
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TiVo unveiled details of how it plans to take its digital video-recording services beyond the basic set-top-box onto other devices and to help deliver Internet-based video content. Its new TiVoToGo service feature was highlighted by Bill Gates, chairman of Microsoft, which has agreed to support TiVo-recorded television programming on its portable media players.
Then DirecTV, whose satellite customers accounted for about two-thirds of TiVo’s 2.3 million subscribers as of the end of October, announced it will soon introduce a new set-top-box using the software of its sister company NDS Group, and not TiVo’s. The move had long been expected and did not help TiVo’s sagging stock, which has dropped precipitously in the past year — down 50 percent — amid concerns about the company’s future prospects.
TiVo shares closed up 3 cents, at $4.23, yesterday.
DirecTV’s move, however, had nothing to do with the resignation, Ramsay said. Nor will the satellite-TV provider’s plans affect TiVo’s path to reach profitability by the end of the year, he said, noting how DirecTV-related sales amounts to about 10 percent of TiVo’s revenues.
“There was no trigger point,” for the resignation, Ramsay said in an interview. “I’ve been driving this for some time.”
He said he initiated discussions with the board about a succession plan a year ago and intends to stay involved in TiVo’s future as chairman, allowing him to focus on the company’s long-term strategy.
Now that the company has reached a critical mass of subscribers and has embarked on a new approach, “it’s a good time to think about new leadership bringing the company forward,” he said.
“I think this is good news for TiVo because if you have a fresh set of eyes looking at the competitive landscape, it may be beneficial in terms of where TiVo is going to fit in the marketplace,” said April Horace, a financial analyst at Janco Partners.
Digital-video recorders, or DVRs, allow users to easily record television shows onto hard disks, fast-forward through commercials and pause live broadcasts.
TiVo, founded in 1997 by Ramsay and Jim Barton, the company’s chief technology officer, helped introduce DVRs to consumers in 1998 and has become the industry’s leading brand name.
But others are fast encroaching, namely cable operators, which are introducing their own DVR features in their set-top-boxes. Digital-video recording is also being built into media-oriented computers and other consumer electronics devices such as DVD recorders and televisions.
The company has also tried to distinguish itself as a technology leader, introducing features such as TiVoToGo, a long-awaited service that lets subscribers transfer programs from their TiVo units to their computers. The company also announced plans last week for a new unit that will use a cable card, which will eliminate the need for an additional cable set-top box.
Ramsay was “a good guy for the company, not just as a founder; he had the right approach to the business … on the other hand, clearly, shareholders disagreed with me,” said Dan Ernst, an analyst at Hudson Square Research in New York. “It could be very positive” for Ramsay “to step down and keep with the vision but get someone else to execute day to day.”