TiVo2Doom

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If you wanted to read the obit of one of the most beloved companies in Silicon Valley, I urge you to read the report in today’s New York Times. Saul Hansell, does a fantastic job of profiling a company in turmoil, and grasping for strategy. Any strategy for that matter. Blowing a deal with Comcast might have cost CEO Michael Ramsey his job, and TiVo its future. The article, highlights the crucial point made by Steve Jobs elsewhere in the Times. The problem, he suggested, was not that Mac TV was not a good idea, but that the cable companies are monopolies. But he did not close the door entirely. The fate of TiVo also highlights the dilemma facing a lot of “exploding TV” start-ups. The technology does not necessarily translate into profits and a business. Here is my breakdown of TiVo’s miserable financial record.

total revenues as a public company, $260 million. Total devices sold, about 2 million or roughly $130 a device. Total (net) losses by TiVo as a public company – $514 million. That’s half-a-billion smackers! Loss per device, about $257.

Here are some selected reactions from around the web.
* Jonathan Greene: By ignoring the inevitable future, that DVR functionality was more commodity than secret sauce, they allowed anyone interested in entering the market to cruise past them with ease.
* Thomas Hawk: TiVo has always been a concept stock rather than an earnings story and I sure bet they would love to have a Comcast deal now. Instead Microsoft has partnered with Comcast with the Foundation HDTV Box and is the one that ended up getting a deal done.
* PVRBlog: When the story of TiVo is written, this Comcast negotiation could be the point when the company’s outcome was decided.
* Engadget: TiVo is sort of in a life-or-death situation right now and might have to take what it can get if it wants to stick around. The company is still not turning a profit, they’re facing increased competition from all sides.
* PaidContent: The bigger picture is much the same as it is within the mobile content industry: if you decide to bypass the operators, then you are truly on your own, and that brings with it the benefits and burdens

Now this is a moment to get a bit pompous and indulge in chest beating a little. Ta-Ta Tivo published back in January 2001, in the real Red Herring, not the one which is doing the rounds these days!

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Steve Rosenbaum

Tivo is code for a movement, not a company or a box. Tivo means- media that you control, not that controls your life. When people like Michael Powell call it a “God” machine, they’re not praying to Ramsey. They’re saying – out load – that the model of a nation rushing home at 7:50 to be sitting on thier coach when their favorite show comes on is just nuts. And being able to push pause, and live your life on your terms is powerful stuff.

So yes, Comcast would have been a good decision for the stock called Tivo (maybe), but a bad decision for the concept called Tivo (freedom).

What’s that wisdom about early adopter product failing during the lul between niche and mass? Apple Newton anyone?

Tahiti is a great name for the next generation of Tivo software. It’s a fantasy island where the world is always sunny and the drinks always have little umbrella’s in them. It’s the right idea – maybe to early – but much like Tivo itself, inevitable.

So you can’t fault Ramsey for not being double jointed enough to both thumb his nose at the rules of the game, and then not be willing to suck up to the very model that he was helping to explode.

I’d argue this is a natural part of the revolution/evolution of both distribution and content. And that’s good.

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