In the world of DVRs, the TiVo is easily the most important and capable device around. With a slew of options that allow you to find shows with ease and a user interface that is second to none, the product is a world-class entrant into the market. Yet while most people enjoy the TiVo — it has had a steady 70-plus satisfaction rate for years — it’s still a fringe device that has little chance of survival unless the company does something to combat cable companies and increase subscriber count. Unfortunately, that “something” may be a dramatically different price point — free.
According to James McQuivey of Forrester Research, who joined me on my CNET Digital Home podcast last week, “TiVo has been fighting for years and has only sold about 1.7 million units of its boxes compared to your cable and satellite companies, who looked at TiVo and said, ‘1.7 million units? We can do that.'”
And it’s that issue: The cable companies can (and have) capitalized on TiVo’s business model by creating sub-par DVRs that mimic the device’s functionality at no additional charge, effectively ensuring that TiVo still incurs millions of dollars worth of losses each year. This despite the fact that the cable company DVRs simply don’t hold a candle to the TiVo; they are incapable of offering the kind of solutions we have come to expect from more advanced devices.
That said, they’re basically free. And as McQuivey explains, that’s what has made cable company DVRs so much more popular. “Compare that 1.7 million units sold-mark to the 25 million units shipped by cable and satellite companies and that must be very frustrating because honestly, the TiVo is one of the best consumer experiences you can have, but it says something about how to get a consumer electronics device into people’s homes when the best designed products can’t take off. And it says something when the comparative knock-off can take off like gangbusters.”
What does that means for the future of TiVo? At this point, things don’t look good. If cable companies can offer an experience that, although less enjoyable, cost about $5 per month, how can TiVo compete? TiVo has little to no chance of ever becoming a profitable company unless it finds a new way to market and differentiate its product. And the only way to do that is to offer it for free.
Given that its current stable of offerings range in price from $100 to $600 — and it still can’t turn a profit — “free” may not be an option. And judging by adoption rates and the fact that the general public is more than willing to take a sub-standard device over a great one because of its pricepoint, TiVo may not be long for this world. If you ask me, that’s a shame.