TiVo, the company which has become synonymous with video recorders that do not need videotape, has narrowed its losses after more viewers signed up than expected.

The firm saw its sales triple in the three months to April from the level of a year ago, rising to $9.9m from $3.2m.

Everything they have set out to execute on, they have done - and very well

Murray Arenson analyst, Morgan Keegan & Co

About 42,000 new subscribers came on board in the quarter - about 10,000 more than observers expected - taking the total customer base to 422,000.

The bottom line for the company was a net loss of $35.1m, down from $50.1m last year.

Analysts had predicted the company would be much deeper in the red.

Staying home

TiVo's technology allows viewers to pause live programmes and play them back using a built-in hard drive rather than a tape.

Subscribers to TiVo pay the company $13 a month, or a one-off $249, for the privilege.

Some observers have suggested that an increasing tendency in the wake of 11 September to stay in with the TV rather than going out may have helped the company persuade viewers to sign up.

In any case, the good numbers, which TiVo said were the result of a dedicated cost-cutting drive and a push to retain subscribers, sent some of those who follow the company's fortunes into raptures.

The company is doing everything that it can do, but when almost half its subscribers are coming from a channel at significant risk, it's hard to recommend it

Peter Ausnit analyst, Deutsche Bank Securities

"Everything they have set out to execute on, they have done - and very well," said Murray Arenson, an analyst at Morgan Keegan & Co.

Reliance

But some remain doubtful about future prospects.

For them, TiVo's predictions of 650,000 customers by the end of the financial year in January 2003 are not good enough - nor is an expected operating loss in the current quarter of $15-20m.

Peter Ausnit, analyst at Deutsche Bank Securities, warned that TiVo needs better distribution, and relies too much on its partnership with Hughes-owned satellite broadcaster DirecTV.

DirecTV is shortly to be bought by Echostar, which has its own personal video recording service.

"The company is doing everything that it can do, but when almost 50% of subscribers are coming from a channel that is at significant risk, it's hard to recommend the share," he said.

TiVo counters this argument by citing its five-year deal with DirectTV and its continuing talks with potential new partners.

And Deutsche's Ausnit himself said that the hurdle was not insurmountable.

"If that risk (of DirecTV pulling the plug) were taken away, I think the company would have a clear road ahead," he said.