TiVo-hNo

by Joey deVilla on January 24, 2007

As I mentioned in a recent post (ostensibly about Netflix' on-demand video service, but really about the digital living room):

If there's one hard lesson that TiVo has taught us, it's that the cable company (and, more often now, the phone company) doesn't like giving ground to others in the living room; not when it comes to watching TV, anyway. TiVo does the most creditable job, but, generally, third parties have a hard time going toe-to-toe with the cable companies when it comes to set-top devices.

Well, today I caught this item in Reuters' MediaFile blog:

TiVo HD BoxYankee Group analyst Joshua Martin says the standalone DVR product category will cease to exist by 2010, “and its dissolution will result in the end of TiVo as we know it.”

Why? Many reasons, Martin says, but it is the so-easy-a-caveman-can-understand-it arithmetic that dooms the pioneering DVR maker:

Cable and satellite providers: BIG. Tivo: small.

Behind the marketshare numbers (18MM DVRs in 2006, less than 2MM were from TiVo) lies the fact that people will accept “good enough at a lower cost” over “better but for a premium.”

TiVo's products and services are, by all accounts, superior to those you get through your CableCo DVR. My Time Warner DVR comes from Scientific Atlanta (now a Cisco company), with software from Aptiv (nee Pioneer Digital). The box is ugly, the software is only tolerably usable now (previous generations have performed like pigs), and the thing seems to need a cold reboot every month (how stupid is it that you have to reboot your TV?), but it also costs nothing up front, and costs less per month than TiVo does.

Time Warner was even able to beat TiVo at its own game on a couple of fronts: I didn't need an external cable box to take advantage of digital cable goodies like on-demand free and premium programming. It was also ahead of TiVo in offering dual-tuners, so you could record two shows simultaneously. Those two come courtesy of Time Warner's integratio of cable services with the DVR hardware.

Between bundling, billing, and distribution, TiVo (and anyone else trying to slide a box under the TV) faces some formidable gatekeepers in the cable companies.

Source: Yankee Group to TiVo: buh-bye… – Reuters Blogs

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