TiVo

By Laura A. Locke/San Francisco

"Are you the devil?" That was the opening zinger posed to panelist Mike Ramsay, CEO of TiVo, as he appeared before a group of TV-ad executives last September. It was the question everyone wanted answered. TiVo's personal video recorders (PVRs) let users download their favorite shows and zip past commercials--and traditional marketers are running scared. By 2007, half of all American TV viewers will own PVRs--and 20% intend to skip ads.

But even if TiVo has been devilishly effective at giving viewers what they want--or eliminating what they don't--the firm has gone through tough times. Last year Ramsay, 53, radically changed the business model to address new market realities. "We built this company when capital was virtually free," recalls board member Randy Komisar. With less money to spend on marketing, Ramsay helped TiVo refocus its strategy on reaching profitability faster while closely managing growth. TiVo broke even in January and is now near profitability.

While it should nab its millionth customer by year-end, Tivo is not the market leader--EchoStar's Dish Network has more than 5 million customers. But like another consumer darling, Apple computer, TiVo has popular, sexy products. TiVo's best asset, though, is Ramsay. On the day of the "devil" panel, he proved he was unflappable and more than convincing: another panelist, then president of digital media for NBC, now works for him. --By Laura A. Locke/San Francisco