Blog Post

Is Amazon Just Using You, TiVo?

Amazon and TiVo today launched a new feature to allow TiVo subscribers to purchase items they see on TV. It’s another move by TiVo to become more than just a DVR, and its another move by Amazon beyond the PC and onto the television. But how much longer will Amazon need TiVo?

In its first incarnation, the “product purchase” feature will use on-screen menus to prompt TiVo subscribers to buy products (CDs, DVDs and books) that are being pimped on talk shows like The Oprah Winfrey Show and The Daily Show. Future versions will offer the purchase option for commercials and even product placements.

I’m starting to wonder if Amazon is just using TiVo as one big, willing test bed. The two companies’ previous partnership to deliver Unbox movie downloads wasn’t exactly a raging success, but Amazon learned from it and is now coming out with its Video On Demand streaming service that will be plugged directly into Sony TVs and other set-top boxes.

Now, Amazon can learn what it needs to about teevee-commerce through its limited partnership with TiVo. It can work out the bugs before rolling out a bigger, better in-house service over which it has more control over and that it can roll out to all of its set-top relationships.

Unfortunately TiVo needs Amazon. With cable companies and satellite companies offering DVRs to consumers like candy, TiVo needs to differentiate itself to add value. But TiVo’s moves like this one and delivering YouTube content just keep it a half-step ahead of the competition, and that half-step will disappear as everyone starts offering the same services. Services like Amazon shopping on your TV.

4 Responses to “Is Amazon Just Using You, TiVo?”

  1. I’m with Chris on this one.

    At some point a company has to figure out whether it is smarter to build or to buy. I think Tivo’s installed base makes it a good buy for this service but then again I don’t even know how easy it would be to just implement it in another Sony TV.

  2. It’s hard to know who is using who without the financial details, but I think that TiVo will end up ahead on this one. In the past their advertising has largely been branded, but by creating a way for consumers to immediately buy a product, it should make TiVo eligible for commissions from Amazon. This may not seem like a big deal, but if they could even add $1 per month from their subscriber base, we’re talking about a $50 million a year opportunity. No doubt we’ll see some experimentation while they get it right, but if QVC can use paid programing to bring in billions, TiVo shouldn’t have any trouble convince their customers to support the company by making purchases, that they were already going to make anyway.