As CES has confirmed, the world has woken up to the potential of over-the-top TV. To which Tivo CEO Tom Rogers might say, what took everyone so long?
While best known for its breakthrough as a recording device, Tivo was bringing broadband feeds to the TV set years before it became fashionable. Tivo was going over the top before over the top was cool.
“We evangelized this for a long time,” said Rogers in an interview Friday at CES. “Everyone thought this was a nice little hobby for people. Now it’s clear this is where television is going.”
But being ahead of the curve hasn’t helped the company much considering it’s coming off multiple years of revenue and subscriber losses, a trend Roger is hopeful Tivo will reverse in 2011 on the strength of both retail sales, which he said ticked up over the holiday season, and distribution deals with cable operators worldwide.
But forgive Rogers if he’s a little frustrated with the operators, who he recalled turned a deaf ear to his warnings that they figure out a way to package video from both their cable and broadband pipes. It took some more prominent competitors to get the operators to notice their new competitive threat. “We’ve found that the entry into this space by Google (NSDQ: GOOG) and Apple (NSDQ: AAPL) has certainly lit a fire under the operator community, which was kind of taking its time as to how this would all come about and affect their business,” he said.
Nevertheless, he still believes cable can hold its ground. But he sees Tivo providing them the very thing the cable industry has long lacked: a compelling user interface that seamlessly intermingles broadcast, cable, DVR and broadband programming. “You can’t have an interface that looks like 1987 when consumers have tablets from 2010,” he said.
While Tivo is keeping its focus on the TV screen, it has an eye on tablets as well; an iPad app will launch in the next few months. But the operator deals are where Tivo stands to turn around its business; a new deal with Virgin Media joins a roster that already includes Cox Communications, RCN and Suddenlink. A long-delayed deal with DirecTV (NYSE: DTV) should kick in this year as well.
As for the retail side of its business, Rogers believes the influx of new competitors had a rising-tide effect on Tivo over Christmas. If anything is hampering Tivo’s future in the stores, it’s Tivo’s past. The company’s own early success is now something of a burden, in that the ease of recording that put the brand on the map is too often still the narrow way consumers perceive them today. What Tivo would rather be known for is for offering the ultimate on-demand experience, recording being just one of the ways they facilitate on-demand. Doing that better than the Boxees and Google TV’s of the world is where Tivo has to win.
Said Rogers, “On the retail side, yes, there’s more people providing an answer to broadband, but no one is providing the comprehensive solution.”