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Summary:

Todd Spangler over at MultiChannel News has summed up the TiVo dilemma: it lives if CableCos let it live, and it dies if they don’t. And the worst part is that CableCos have little incentive to see it work, especially since they have sunk billions into […]

Todd Spangler over at MultiChannel News has summed up the TiVo dilemma: it lives if CableCos let it live, and it dies if they don’t. And the worst part is that CableCos have little incentive to see it work, especially since they have sunk billions into their VoD infrastructure.

I certainly don’t see cable companies suddenly starting to flog TiVos as awesome alternatives to their own set-tops. Operators potentially lose revenue if a customer chooses a TiVo CableCard box. TiVo also gets its Trojan horse in the door as a rival TV-related service provider, with (for example) the over-the-top Amazon.com movie-download service that Amazon has touted as providing a “better experience” than cable VOD.

And like myself, he isn’t convinced that the new $299 HD TiVo is really the answer for the long term survival of the company. So the only option is to license TiVo technology to CableCos (Comcast & Cox), which also means that the company is left relying on notoriously unreliable partners for its revenues. We are still waiting for the Comcast Box, which is by now looking like a Yeti, though there have been some sightings on the other coast.

As Spangler points out:

The MSO may merely be embracing TiVo as a tactical, defensive measure. Note that under these agreements, Comcast and Cox will give a cut of the monthly lease fee to TiVo. That means either that (A) they’ll earn incrementally lower margin on TiVo boxes deployed versus their own DVRs or (B) they’ll price TiVo boxes at a premium. I’d bet on option B.

That limits the company’s options. No one can envy TiVo CEO Tom Rodgers his job.

  1. to TIVO’s credit, it has hung around longer than I suspected. Since DirectTV stopped pumping it, TIVO’s net new subscribers have been anemic.

    If the cable companies will RENT the box to you for basically the same price as TIVO will sell you its program guide, since the monthly costs are the same and the TIVO solution requires a hardware purchase and the cable solution doesn’t…how can TIVO survive that with its current model?

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  2. Tom Coseven Friday, July 27, 2007

    The options for Tivo have never been good. Since birth, Tivo has wanted to move to a software model, but except for DTV it was never able to get the MPVD’s to buy in. At this point, that ship has sailed, because the MVPD’s have their own “good enough” units. Tivo can’t survive as a premium software brand on other vendor’s boxes (royalties are in the $10-15 range, so they need huge volumes, or an expensive back-end subscription business to survive). They can try to sell-out, but the best candidates were Apple, Cisco, Motorola and Sony. Apple and Cisco don’t need them, and Moto and Sony have enough problems. That leaves Google.

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  3. There is an opportunity is to be an agnostic IPTV box for all these “new” delivery services – not just the Unboxs’ of the world but also the Veohs, Jamans, and torrents. Low cost enough box (nearly check), HDTV support (check), with broad content provider support (nearly) and it’s got a place in my household (it has already, but this way, it will stay). I know Akimbo was trying half this model, but Tivo has more boxes in more non-techie households than Akimbo will ever get. Sure, cable VOD is instant, but i’m sure TiVo will find a way to start playing content while downloading, without needing it to be fully downloaded.

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  4. Ryan Williams Friday, July 27, 2007

    Look, when TiVo really starts tanking someone will swoop in and buy them. The brand has way too much good will to away completely. The price just has to come down enough.

    I still think Cisco is the best fit for TiVo. The Scientific Atlanta experience is an abortion and SciAt already has partnerships with many of the cable providers.

    I don’t think Google makes much sense from a business perspective. They just got out of the one hardware business they were when they let Dell take over their search appliance manufacturing.

    Do not forget that TiVo and DirecTV might be “getting back together” soon once John Malone takes the keys from Rupert.

    TiVo: “The rumors of my death have been greatly exaggerated.”

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  5. Part of the comcast deal is the ad-swapping,no? That alone would make it worth it to Comcast. In addition, I suspect somebody is studying whether tivo users fast forward through commericals in a different manner than generic DVR users. At least on my tivo, it is much easier to speed up the commercial (at 3x speed) than on a comcast box. However, I don’t have the 30 second skip enabled.

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  6. Tivo is toast. Retail distribution cannot compete with the direct service distribution the cable companies offer to consumers.

    Tivo did not execute well enough when they launched. Achieving critical mass was key for fighting the cable companies. It is too late now.

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  7. Story of the independent ISP industry. Monopolies kill innovation and services.

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  8. [...] has a great piece up today on TiVo’s survival dilemma, which Om Malik goes on to validate over on GigaOM. Todd’s piece is a [...]

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  9. The right question should be:
    Will TiVo Strangle Cable?

    The reason Direct-TV decided to stop TiVo subscriptions was the rapid acceptance it had among satellite users. They fell in love with the TiVo interface. Motorola and Cisco have not been able to build a better box as yet. Thus Comcast, Cox, Cablevision, Seven Networks want to launch the best, and the most unchallenged set-top interface.

    Tivo has so many features and advantages over the roost that, it is a die hard for competitors. Maybe TiVo will end-up strangling all cable boxes out.

    The main reason is that the TiVo software for set-top-boxes is like Windows for PCs and it is protected. I is a universal easy to use interface on TV-=ready to function with MSOs triple players.

    Those who argue the contrary are either TiVo enemies or investors shorting TiVo shares.

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  10. I agree with Gekko – moving on the IPTV market is probably the way to go for TiVO.

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