Ready, Fire, Aim! - Mihail's Public Blog: TiVo: Beginning of the end?

Wednesday, February 2, 2005

TiVo: Beginning of the end?

We recently bought another TiVo box late last year -- after unsuccessfully trying to install one a year or two ago -- and tried to connect it to our HDTV Comcast cable box and a Phillips LCD HDTV...with no success, yet again. Guess where are TiVo is going to go? It's going to eBay-land! The fact is that TiVo has a great brand but because it has been unable to build alliances with the cable box companies, nor has it dealt with the growing HDTV phenomenon, the user experience setting up TiVo has been less than ideal. No wonder the company's future is now questionable with the resignation of its top two execs over the last couple of weeks and no major alliances in place. According to this WSJ story (subscription required):

...cable operators embraced DVRs after their satellite-TV rivals began wooing subscribers, in part, by aggressively promoting DVRs to customers. Indeed, TiVo's one major distribution partnership, struck several years ago, is with DirecTV Group Inc., the top satellite-television company, which included TiVo's technology in its DVR. Now, DirecTV accounts for roughly 60% of TiVo's 2.3 million users [although it will soon be launching its own DVR since News Corp has acquired a stake it it and also owns another DVR company]. Magna Global, a media research firm owned by advertising company Interpublic Group of Cos., estimates there were 5.3 million DVR users in the U.S. as of September.

...The spread of DVR technology was almost inevitable. Sets proliferated as the combination of software and hardware technologies that TiVo pioneered became much easier and less costly to duplicate. For example, prices have been rapidly falling for the key component inside the box, a hard-disk drive that can store hours of recorded programming. Meanwhile, other satellite and cable providers continue to expand their use of non-TiVo DVRs. EchoStar Communications Corp. -- the No. 2 satellite provider -- had almost 1.5 million users of its own DVR as of September 2004, up from 914,000 a year earlier, Magna Global estimates. Although they were later to the game, big cable operators are growing even faster: Time Warner Inc.'s cable unit had more than 709,000 subscribers as of September, up from 251,000 a year earlier, while Comcast had 168,000 subscribers at that time, up from 7,000 a year earlier, estimates Magna Global.

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