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TiVo Blames Big Cable for Blocking Set-Top Innovation

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TiVo (s TIVO), in response to an FCC request for comment on “video device innovation” yesterday, pointed to abuse by cable companies that put their own business considerations ahead of the best interests of consumers, and in so doing, have stifled creativity in the digital device realm. (A hearty hat tip to Dave Zatz for bringing the response to our attention.)

It’s easy to see why TiVo might be bitter at the cable industry. After all, with the launch of its first DVR, the company introduced a revolutionary technology¬† that cable companies copied, co-opted, and used to create a whole new revenue stream for themselves. And now, TiVo says, those same companies are leveraging control of their networks to block it and others from innovating on that technology.

The response, attributed to Matthew Zinn, TiVo senior vice president and general counsel, claims that “innovators like TiVo…are put at risk” by cable companies that ultimately control the design and functionality of devices that compete with their own set-top boxes and DVRs. Because cable companies can disallow certain features from working with their conditional access networks, TiVo says many features that it would like to implement are either barred by cable companies, work inconsistently across different networks, or are “subject to being disabled or made less useful by MPVDs [Multichannel Video Programming Distributors — in English, cable companies] at any time.”

At the top of the list for innovations blocked by MVPDs is the ability for TiVo and others to show Internet video and interactive applications alongside traditional cable programming. TiVo would like to incorporate interactive content into a unified user interface, but says that “tru2way products are forbidden by license from (1) providing any choice in user interface when accessing interactive services, and (2) including non-MVPD programming services, such as Internet-delivered content, in the user interface that displays the available cable programming.” As a result, TiVo says, consumers don’t have access to all the content that’s available to them, because gaining access to that content would interfere with traditional cable business models.

By blocking access to interactive applications in the user interface, TiVo says cable companies are not just protecting their pay TV business, but also limiting the ability of it and other device manufacturers to compete with leased DVR offerings. “The cable industry obviously knows that, when faced with the choice of buying or leasing a set-top box that performs exactly the same functions, in the same way, with the same user interface, consumers will opt to lease set-top boxes,” TiVo said. But by not having access to all of a cable company’s content in addition to other sources, TiVo says device makers can’t create a competitive product that people will buy instead of lease.

TiVo may have a point; after all, the company has been hemorrhaging subscribers over the last several quarters, as more consumers take to leasing DVRs from their incumbent cable providers. Without a way to provide a more compelling product or service to consumers, it’s unlikely that trend will be reversed anytime soon.

8 Responses to “TiVo Blames Big Cable for Blocking Set-Top Innovation”

  1. Encrypted TV kills innovation. It’s killing Tivo, Moxie, MythTV, Windows Home Theater, etc, etc.

    Let’s hope the new FCC proposal for a box in the basement that provides open signals in the house is approved.

    • Your statement assumes that you can’t innovate if DRM is involved and although it most definitely slows things down, if it was true then the iTunes Music Store would’ve never existed and DVDs wouldn’t have been popular.

      No, what we really need is open DRM and the best example is SSL. I’m not saying SSL would work here, just that it proves that we can have protection and innovation at the same time.

      Of course the real sad part is all the content get pirated anyways, so ultimately the DRM is a waste of time.

      • There is zero third party innovation on top of DRM’d iTunes. It is a closed Apple system.

        It is not possible to innovate on top of the existing DRM’d cable system since it is not possible to easily attach alternative set top box equipment to it.

        Cable has made life so difficult for Tivo hardly anyone will buy a Tivo any more. Note that Tivo was doing fine before cable closed their signals with DRM.

        This is same problem with Apple. Only iPods work with Fairplay DRM’d music since Apple won’t license Fairplay to anyone else.

        DRM is a means to an end. The end result is creating a monopoly by refusing to license any third parties a DRM key.

    • Ryan Lawler

      This was my thought exactly. It doesn’t seem smart for TiVo to take an adversarial position to the cable companies right now, esp. if it hopes to license its software to them. Regardless of whether or not it can create a DVR with a unified user interface, it seems like the company’s hardware business is done for.