The name TiVo was once synonymous with an entire product category, Digital Video Recorders. Now the vultures are starting to circle above TiVo, according to a New York Times story by Saul Hansell. What went wrong?
The answer is obvious: TiVo chose to cozy up to the TV networks rather than to its customers.
When my family bought a TiVo, it was a cutting-edge product (the TiVo, not the family; but come to think of it, the family was pretty cool too), delivering a customer experience that was hard to find elsewhere. Since then, eight years have passed – an eternity in the electronics business – and TiVo is still selling essentially the same product. Sure, they have added a few bells and whistles, but nothing that made us want to run out and buy a new box.
TiVo made a decision, early on, to cozy up to the TV networks, to stay within their comfort zone. But the networks’ comfort zone is awfully confining. ReplayTV took a different path, seizing the technological lead with new features that angered the networks; and the networks brought a lawsuit that ReplayTV couldn’t afford to defend. At the time, TiVo execs probably chuckled and congratulated themselves for their caution.
Now the time has come for TiVo to pay for its timidity. Its technology is no longer distinctive, and the rising tide of DRM threatens to cut TiVo’s products out of the TV delivery pipeline. (Remember, DRM is just another name for deliberate incompatibility.) It’s not clear what the company will have to offer future customers.
Which brings us to the key paragraph in the New York Times story:
Last week, TiVo announced that Mr. Ramsay was stepping down as chief executive but would remain as chairman. He said the change was his idea and had been under discussion for months. Several board members and others close to the board confirm that. But they also said that the board hoped to hire someone with less of Mr. Ramsay’s fierce belief in the power of TiVo’s technology. They said they preferred someone with an ability to repair TiVo’s relations with the big cable companies.
[italics added] As in so many organizations, TiVo’s response to crisis is to do more of what got them in trouble, rather than returning to the strategy that made them successful in the first place.
This is bad news for TiVo, which desperately needs new, distinctive technology if it wants to survive. It’s bad news for customers too.
UPDATE (2:00 PM): Matt Haughey has a nice response over at PVRblog.
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I don’t think TiVo “wants” to get closer to Big Cable. I think they noticed that Scientific Atlanta has been outselling them something like 5 to 1, and they checked why… Scientific Atlanta got close to Big Cable by bundling their boxes with cable service. Where TiVo dominated the tech side, SA dominated the slimey business side. Not worth many accolades, but it keeps the bottom line looking appealing.
Wow, Mason. Is that a piece of comment spam I see?
BTW, is TiVo really 8 years old? I bought one in 99, and I thought I was an early adopter.
TiVo’s problem is that they didn’t have sufficient IP protection. They’re essentially a software company, with software that is all too easy to duplicate. The amount of money TiVo tried to charge, or had to charge, to makers of cable and satellite boxes only succeeded in motivating them to create their own software. Without a strong enough patent portfolio, there has been no way for TiVo to attract more partners or even retain the partners it has acquired. They all prefer to roll their own and stop paying royalties to TiVo.
It seems to me that the TiVo, ReplayTV, problems all are due to various “bundling” commitments.
. 1) The hardware was sold at a loss leader price based on the assumption that it would be paid for by the service.
. 2) The service was bundled with a specific hardware, not transferable.
. 3) There was no capability to pride the software on different packages.
. 4) The Content Providers, the Distribution companies, and the Software builders were un-willing to allow open access add ons to allow others to build on the basic system.
So people had to purchase an All in One package.
I don’t know if it is too late for TiVo, or Replay, but I think that they, and the Content Distributors might benefit if there were three layers:
. 1) Hardware — Allow us to purchase/rent… the hardware that would have only the VCR capable software. (~$200.00) or so, and if we wanted easily expand it, add tuners, switch to different systems.. without violating its warrantee
. 2) OS — Allow us to add on the TiVo/Replay software that would access program guides, schedule by name, generate wish lists… ($300.00) — These would, I hope ride on top of a standard API for “1)” and provide standard API’s for specialized add-ons “3)”
. 3) Applications add ons — Allow us to add on the either the basic system or a fully functional OS the special purpose software that perhaps the big OS producers might not want to provide, e.g. Email, Web scheduling, Protected DVD Save and Restore?, Re-compression of programs, Disk Storage display… I don’t know what third party people could offer if they could build the software, but it would be interesting.
This would allow us to purchase various parts and pay for the quality of hardware and software that we wanted and pay more as better hardware and software emerged.
After all this model worked for normal computers, e.g. IBM, DEL… : MicroSoft, Linux… : Symantic, Zone Alarm…
I must be an oddball. Everytime I travel, I check what’s on cable to see if I regret my decision to not buy cable. I haven’t yet. Loads of commercials, and astonishingly terrible programming. (The same is true of most broadcast television, too). Except for SpongeBob, Futurama, and The Daily Show, there’s nothing on that’s worth the time it takes to watch it. The news/propaganda on Fox and MSNBC was astonishing. As near as I can tell, there’s nothing worth recording, and no time to watch it anyway.
Since ReplayTV did get squished, it’s hard to sensibly argue that TiVo should have followed the same course.
The fundamental problem – one that is quite familiar here – is that any DVR company needs the cooperation of the networks to survive. This is a problem that comes from the law and the power structure of the businesses, not the management decisions of a DVR company.
Comcast offers a Motorola high definition recorder with software by MicroSoft. The beta software is available in the Seattle area. An online forum with comments from high tech users (retired and active software/hardware engineers) and microsoft addresses all of the technical glitches. Apple and Sony are also in the mix as any Mac can record tv with freeware via the firewire port and Sony showed up at a recent public gathering to endorse HD editing with a Mac.
Woe to those who purchased the lifetime subscription!
So, the options will be to go with a (read: functionally limited) cable/satellite-provided PVR or Roll your own, ala MYTH.
Well, boys and girls, time is running out. Remember you have to buy your HDTV cards before June (or was it July?) THIS YEAR, because after that, they’ll be illegal to sell in the states.
Maybe we’ll have to coyote some up from Mexico after that. 😉