The Sad History and (maybe) Bright Future of TiVo
TiVo Relaxes on his Recliner Outside the CES Convention Hall
For a company that hasn’t announced a new hardware platform in years, TiVo seems to be all abuzz in recent weeks.
It’s been a long time since TiVo released a major new hardware product – about 3 1/2 years since the last major DVR release, the high definition Series3. Sure, they also released the TiVo HD and HD XL
Investors need something to cheer about. For pretty much the last three years, TiVo has been losing subscribers every quarter.
Fans like me were waiting for something new. I speculated on (or rather dreamed about) what might be coming prior to the start of CES. But TiVo disappointed us and announced nothing new at the big show.
But now TiVo looks like it’s waking up from its hibernation and is ready to do something. Oh, but what? …
Wow! Not Underselling this at all. TiVo's really going all Apple here with this show!
The Big Announcement
For starters, TiVo has scheduled an announcement – a big announcement to be held at nothing less than the top of the Empire State Building 30 Rockefeller Center. (I wonder if they’ll have a statue of King Kong holding a TiVo doll in his hand. Alec Baldwin, Tina Fey, and the “Kenneth” guy will be there.)
And they do need to announce something big. TiVo’s subscriber numbers are down – way down. In just the last reported quarter (Q3 2009) TiVo lost about 10% of their subscribers – and nearly 40% of their peak reported numbers versus January 2007. That puts them at about 2.7 million subscribers at the end of last October (At the peak they were at about 4.4 million.)
Three years of subscription declines at TiVo(click to enlarge)
TiVo the icon
This is the story of an iconic company that’s losing its icon status. very few companies have had their company or product named turned into a verb:
I Xeroxed the memo. (Even though I used a Canon)
I Googled a review of that movie and it doesn’t look interesting.
I Tivo’d Heroes (even though one might have used the cable company’s crappy DVR)
But “to TiVo” is seemingly losing favor. And people are actually starting to use the generic “to DVR”. If you Google for these terms and look at the number of pages matched, you’ll see. “I DVR’ed Heroes,” just doesn’t sound right – it’s that extra syllable.
False starts and missteps
When you look at that graph of subscription gains/declines, it makes you wonder just what TiVo has been doing for the last three years? Even prior to that, how can a brand be so well recognized, yet so unpopular? Even at 4.4 million, that’s less than 4% of US TV households. And it’s been almost 11 years since the first TiVo went on sale.
A lot of fighting against the Man
When I think about it myself, I wanted a TiVo ever since I first heard about it. In its early days, cable TV was virtually all analog. But, anyone that subscribed to premium channels or upper tier packaged channels was forced to use a descrambler box that they could only get from their cable company. So for TiVo to record a program on a scrambled channel, it had to somehow control the cable box – customers had to deal with two boxes to watch TV. To gain control, TiVo users had to install a MacGyver type contraption to allow the TiVo box to send infrared remote control signals through a series of mirrors to the cable set top box. That intimidated a lot of potential customers.
The next problem was that using a cable box may nullify one of TiVo’s best features – the ability to watch a live program while recording another. If the channels that you want to watch and record are both scrambled, you couldn’t do it since the typical cable box could only descramble one channel at a time. And my cable company at the time scrambled everything except the over the air channels. So, myself and others waited.
Then, a little into the new century, digital cable started to become popular with the promise of a myriad of new channels to choose from. Initially, this only made matters worse for TiVo. Many of those who might have not subscribed to premium channels now found themselves enticed by some of the new digital-only channels: DIY Network, Fine Living, Home and Garden Television, BBC America. Those not willing to give up dual tuner functionality went elsewhere.
Even more trouble for TiVo: high definition over-the-air digital broadcasting was also charging forward. Missing the boat on HD was entirely TiVo’s fault (at least when talking about over-the-air HD). HD broadcasts were set to begin on a wide scale in 2002. Cable companies weren’t quite ready for the HD launch, but neither was TiVo. The availability of HD (which is inherently digital) helped push cable companies to move further into the digital space.
The inability to tune over-the-air high definition and scrambled cable (digital or analog) became major un-selling points for TiVo – especially amongst the most profitable videophile market as well as much of America – the non-technical crowd – that don’t want to mess around with remote control hacks and stuff like that.
For both crowds it would be until the Fall of 2006 before an answer came from TiVo.
In order to address digital cable, TiVo would have to wait for the cable industry to comply with a Congressional mandate to open up to third party set top box makers. The idea, as mandated by Congress was well intentioned, but the follow through by the FCC, was disastrous. The mandate came in 1996, but it wasn’t until 2005 that it became a reality. The outcome, was a clunky, feature lacking system called CableCard. At first it was welcomed with open arms by consumer electronics manufacturers. Many TV’s from Sony, Panasonic, Samsung, and other companies were rolled out with slots for CableCards.
In theory, CableCard allowed any company to make a device (televisions, recorders, simple tuners, etc) which would absorb the functionality of a traditional cable TV set top box – the key feature being the ability to descramble scrambled content. The cable company would provide a CableCard to customers for low or no cost which would make the CableCard device compatible with the cable companies decryption systems. So without the need to rent a set top box from the cable company, one could use a device bought online or at a local electronics store which would be able to descramble channels itself.
In the case of TiVo, CableCard meant that the TiVo box could finally record one scrambled channel while letting you watch another – or you can just record two programs at once while you watch a totally different, pre-recorded program.
So while CableCard solved some problems, there were still a few other problems for TiVo and other CableCard implementers:
- CableCards still had to be rented from the cable company. The hopes of saving money while not not needing to rent a box were not there. (In my case, Cox Communications charges me $2 per card).
- CableCards had to be professionally installed – not DIY . So, customers would still have to pay an installation fee on top of the monthly fee – no different than the old fashioned set-top-box environment. (Update 2010-2-25 7:30PM PST: Commenter Max Williams (see comments below) indicates that some cable operators in some regions do allow for a self-install of the CableCard and at no-cost for rental)
- The initial CableCards only let devices decode one channel at a time. For TiVo, that meant to record one show while watching another live show, TiVo had to have two CableCard slots. And customers would have to rent two CableCards.(In my case, that’s $4 a month)
- CableCard was not compatible with the interactive features of digital cable systems – anything that required sending a signal to the cable company and awaiting a response: namely Video On Demand/Pay-per-view.
Add it up and consumers are largely not interested in CableCard – maybe with the exception of the videophile market. But the cost and complexity are too much for most people.
To this day, many of these problems remain in the cable TV market. A couple of things have changed. For one, a new iteration of the CableCard standard came out allowing for decoding on multiple channels while using a single CableCard. This was called CableCard 2.0, aka the M-Card card. But M-Cards didn’t eliminate the need for a CableCard rental or professional installation. And they still didn’t provide compatibility with Video On Demand and other two way services.
DirecTiVo
The big rise in the chart was due to the existence of the so-called “DirecTiVo” boxes – TiVo devices which were compatible with the DirecTV satellite TV system. The vast majority of the rented subscriptions were DirecTV customers. As opposed to retail cable TV TiVo users, DirecTiVo users had very few problems with their TiVos.
But sales went down when DirecTV stopped working with TiVo in 2004/2005 and delivered its own DVR made by NDS (At the time Rupert Murdoch’s News Corp had gained controlling ownership over both DirecTV and NDS). On top of that, DirecTV was in the middle of launching new satellites to expand their lineup of HD and local market channels. The new satellites began using a new compression system (MPEG4) for the broadcast of signals. That meant that happy TiVo users would not be able to access and record the new channels unless they switched to a new NDS DVR.
This was horrible news for TiVo. At the peak of subscriptions, roughly 2/3 of TiVo’s subscribers were DirecTiVo users.
You can also see that retail TiVo box subscriptions for cable TV users was still climbing after the loss of new DirecTV sales. But, with the problems that we just mentioned regarding TiVo and cable, sales and subscriptions weren’t climbing fast enough to make up for the sharp loss of DirecTV users. Now, even cable TV user subscriptions are falling.
Yet more future solutions
Naturally, the remaining problems with cable have sparked complaints from both consumers and consumer electronics manufacturers who claim that the cable industry intentionally designed CableCard to be a flawed system to protect their set-top-box rental revenue as well as control over content that consumers could access (like Internet delivered content). The FCC called for some changes. CableLabs, the collaborative technology development arm of the cable television industry attempted to allay complaints with two, still controversial, proposals.
tru2way
The first solution is called tru2way. tru2way would give CableCard using devices access to two way services. But, yes, it will still require the use of a CableCard – so consumers still have the two unpalatable problems of requiring an installation appointment as well as the monthly rental fee associated with CableCard. But cost and installation time aside, it claims to bring tru2way compatible devices up to functional parity for the first time ever with cable company rented equipment.
But tru2way is not without its complaints. First, the biggest cable operators in the US pledged to have their network tru2way compliant by July 1 of last year. As of today, there still aren’t any tru2way ready cable system (aside from some small test markets). In TiVo’s financial statement issued last November, TiVo said that it was working with Comcast on tru2way implementation but was still a year away (maybe 9 months now?).
Additionally, many electronics makers, TiVo included have complained that tru2way ceded too much control over the user interface to the cable companies. Instead of being a set of standards for defining a request/response protocol between a tru2way box and the cable system, tru2way specifies that two way services will be activated by requiring the device to download a Java based software application, which would take control of the screen and interact with the user. For die-hard TiVo fans, that’s extremely nerve wrecking to risk giving up a beloved user interface for one created by the not-so-beloved cable company.
The biggest problem with tru2way seems to be that it’s still largely vaporware. Only Comcast seems to have a working tru2way cable system – and only in about three cities nationwide.
DCAS
There’s yet one more future technology in the air. A second proposed solution from CableLabs is called Downloadable Conditional Access System (DCAS). DCAS promises to clear up all of the problems of CableCard. Like tru2way, it would provide a DCAS compliant device with two way capabilities. But, unlike tru2way, it will eliminate the need to rent a card (or anything) from the cable company. Sounds great, but the proposal was first made to the FCC in 2005. The cable industry’s lobbying group, the National Cable & Telecommunications Association (NCTA) promised nationwide support by July 2008. Today it’s nowhere in sight and is presumably dead.
Oh yeah. One more problem: SDV
The latest wrinkle giving heartburn to TiVo, Moxi, and anyone else that still has a stomach for the third party set-top-box market is called Switched Digital Video (SDV). The concept here is that in order to cram even more channels in to the cable lineup, a new technique is needed to avoid running out of frequency space. On traditional cable systems, all channels (scrambled or not) are sent down the cable to every home concurrently. But now, with all of those pay-per-view channels using up space, there is no more space for new channels. So, to add additional channels, digital cable set top boxes can use a concept called Switched Digital Video. Most channels will still be sent down the pipe as usual, but additional channels may be moved into an SDV tier which will only be sent if the digital set top box requests it. As a result, cable companies can theoretically offer an unlimited number of channels. This is a competitive move against satellite providers DirecTV and Dish Networks which have typically offered many more channels than cable – and more coveted high definition channels too.
But now the problem is that third party boxes like TiVo aren’t compatible with SDV. Some cable companies are offering to provide TiVo users with the installation and rental of what’s called an SDV tuning adapter which would share the incoming cable with TiVo and plug into TiVo’s USB port. To tune an SDV channel, TiVo will make that request via USB to the SDV adapter. The SDV adapter, in turn, would then signal the cable system to send down the selected channel over the cable input to the TiVo (or other STB). But, this adds the extra complexity of an extra box supplied by the cable company – which is something that many folks hoped to avoid by going with TiVo in the first place.
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Lots of Lemons. Now, how does TiVo make some Lemonade?
Turning TiVo around is going to take some hard work. There have been some positive pseudo-announcement coming from TiVo over the past couple of years. But no new major products yet.
The most interesting news, for disappointed DirecTV users is that DirecTV and TiVo are working together again to deliver a new TiVo box for the satellite service. But that was announced in 2008. The claim is that the new DirecTV will finally see the light of day in the first half of this year – perhaps as soon as March 2.
Way back in 2006, TiVo announced similar partnerships to develop proprietary DVRs for the Comcast and Cox cable systems. In the case of Comcast and Cox, TiVo is working to make their software (parts of it at least) available for download onto certain Motorola manufactured DVRs – not terribly exciting.
More recently, TiVo announced a similar joint development effort with RCN. This seems to be a lot more interesting as this is both a hardware and software project. TiVo will be promoted and sold by RCN as the premier DVR for the RCN system. Additionally, TiVo, RCN, and a third party technology company, SeaChange, worked to engineer both two-way capabilities (for Video on Demand and other interactive services) as well as SDV support without using tru2way or an SDV tuning adapter.
What about TiVo’s retail offerings?
This could be where things get very interesting. The wording on TiVo’s invitation for their March 2 announcement (“Inventing the DVR was just a warmup.”) makes you think that they have something fun planned. That wording makes for an incredibly bold claim – and sets them up for high expectations. A simple downloadable version of TiVo for Cox and Comcast doesn’t sound that exciting. Even, the RCN endeavor (while great news for RCN users), doesn’t sound inventive enough to make the TiVo’s founding invention look like a “warmup.”
But two-way and switched digital video are probably way off the table – otherwise TiVo wouldn’t have just filed a complaint about the cable industry to the FCC last week (PDF of complaint here).
Of course, there’s still plenty of room for innovation in the retail market as I posted numerous potential new features back in early January. And I’m sure TiVo’s engineers have been dreaming up other ideas over the last few years.
Then there’s always the accidentally leaked TiVo Premier product – which doesn’t look it would anything new. But if introduced in conjunction with a radically new retail product, then we might be looking at something good. The TiVo Premier could play the role of an inexpensive entry-level product. With the new technology product on the high end – with a high end price.
One of the past complaints about TiVo is its price. The Premier, while sporting largely no improvements over the existing HD product, could be enticing to many new TiVo customers if it came in at a lower price. Being a new design, the Premier could take advantage of new, lower cost components which match the power of the components in the older HD in order to come in at a new lower price point. This would especially useful if they finally pull the plug on the current low end $149, standard definition only Series2 box. With HDTV’s dominating the store shelves – even on the low end – TiVo is going to need a low end HD DVR if it wants to play better in the low end of the market.
Advertising and Data Services
Another area for potential growth are their advertising and data services. TiVo displays links to ads on the TiVo main menu, when you hit the pause button in the middle of a program, and in other spots. Regular TV commercials can also get TiVo specific services that work in conjunction with actual airing of the commercial – even if you’re fast forwarding through it. For instance, while fast forwarding though a commercial, TiVo will sound a chime and display a TiVo superimposed message asking you to press the “Thumbs Up” button on the remote control for more information. TV networks can also use the service to enable the Thumbs Up button to instants schedule a recording for a show that’s being recorded in a commercial.
The data service is quite fascinating. It’s like the old Nielsen TV ratings system on steroids. Being a pretty smart computer, a TiVo box can track viewing habits down to a resolution of only one second. The data can be sold to advertisers who want to know things like: what commercials do people watch versus skip or fast forward over, are certain parts of a program watched more than once, or in segment based shows (like Saturday Night Live) do people only watch certain parts of the show (maybe the “Weekend Update” segment of SNL is the most popular and might have a higher value for commercials than the opening monologue).
But for advertising and data services to really make money, TiVo needs more subscribers. I frequently hear people complain about the monthly fee as being a reason not to get a TiVo. But if the price of TiVo monthly service can be brought down - ideally to zero, TiVo might be able to attract more subscribers and boost the value of the data and advertising businesses. (The common complaint about paying TiVo a monthly fee is that TiVo service essentially is just for getting program guide data – which is largely free online via TVGuide, Zap2It and other places. And TiVo itself is getting the guide data from the same source that many of the free advertising supported online listing sites get their data from – Tribune Media Services)
There’s a couple of independent ways to achieve this. its key to note that TiVo probably doesn’t make much money from the retail sale of the box – the service revenues are needed to bring TiVo over the top. If advertising and data sales can be used to better monetize the service, then that revenue can be used to bring down the monthly service fee – which will in-turn bring in more customers. One recent monetization route was inked with Google. Google, which now sells traditional television commercial air time though its AdWords service now has access to TiVo’s usage data – which helps ad buyers make more informed decisions before bidding on advertising slots.
Secondly, if TiVo is better able to drive down the manufacturing cost of the presumed TiVo Premier, then it can be more profitable at the time of sale. With a more profitable box, there’s less of a need to rely on monthly service fees as a tool to recoup a loss on the box. So, that gives TiVo a second way to bring the monthly service down – and bring down the cost of the set-it-and-forget-it lifetime subscription fee. They should even be able to sell a moderately priced retail product that simply includes lifetime service (taking a page from the ARRIS Group’s Moxi
When TiVo was younger, most of their customers used the TiVo device’s built in modem to dial-in (yuck) to the TiVo service nightly to get updates program guide data and such. As broadband Internet connectivity has gotten more popular in the decade since TiVo’s creation, dial-in service is less important. Dial-in modem banks are also quite laborious and expensive to maintain. I would hope that TiVo’s newest products completely abandon support for dial-in data access. Since I would suspect that most of TiVo’s recently acquired customers use their Internet broadband connection to access the TiVo service, this should be an easy feature to drop (otherwise, how did Netflix Watch Now, Roku, Boxee, and Popcorn Hour all get so popular?). Any infrastructure TiVo was maintaining to provide the dial-in data service can be eliminated to save money.
When the service can be purely driven over the Internet, the marginal cost of providing the service goes down to near zero. But the value for advertising and data goes up.
The Road Ahead
Going forward, TiVo definitely has some potential bright spots in the future. The biggest near term revenue contributor will likely be the new DirecTiVo box. While presenting TiVo with a much smaller market of potential customers, TiVo’s box for RCN looks like it’ll be a winner. As for Cox and Comcast, while they are both huge operators, a software only download for their existing DVR rentals doesn’t sound all that promising – especially since, in Comcast’s case, the operator seems to be giving TiVo service away for free to their Comcast DVR users. At a price of nothing, how would TiVo make money from that? Maybe TiVo is getting a cut of the $9.95 monthly fee for the Comcast DVR rental. Or TiVo is hoping that data and advertising make the endeavor profitable – which is n0t entirely a bad idea if it attracts millions of new service users.
As far as retail goes, that seems to be the most closely guarded part of TiVo’s plans. But it sounds like we can expect a new high end product and maybe also see the Premier unveiled as the new low end product at the March 2 event. And if TiVo can lower their monthly service fees they can achieve a critical mass to make their advertising and data services more popular.
TiVo’s future still has some bumps in the road to overcome, but with the right moves it should eventually be pretty smooth.
Update (2010-2-25 6:30PM PST):
Engadget received a leaked screenshot from what purports to be the BestBuy inventory application for employees. If true, TiVo’s Premier device will begin shipping on March 27 and will largely mirror the TiVo HD and HD XL in pricing ($299/$499). The bullet items in the screenshot seem to indicate not much change as well from the HD and HD XL. So the hardware capabilities seems to be as expected. But the screenshots also indicate that there’s no change in pricing for the TiVo service.
BusinessWeek is also reporting their guess on the March 2 announcement. But BusinessWeek (which is going off of a quote from TiVo CEO Tom Rogers) is expecting an announcement about an ability to search for programming on both TV and Internet sources like YouTube and Amazon Video On Demand
[tubepress video="iPirnN_z9Cw" hd="true" showRelated="false" showInfo="false"]
Of course, Tom Roger’s comment to BW on the topic was “You will see us talk about a stunning new way to make the process of finding and selecting video a truly wonderful experience for the consumer.” So, maybe the BusinessWeek reporters aren’t that familiar with TiVo and interpreted that statement to mean what many TiVo users already know as the TiVo Search Beta. Of course, there’s lots of room for improvement in the Beta – and maybe that’s what Rogers was alluding to. If you watch the above video, you can see that entering search text is kind of slow with just the arrow keys on the remote. As I hoped for before, the search can be sped up by keyboard as well as overall hardware improvements like a faster CPU and I/O.
A return to DirecTV. Plus Comcast, Cox, RCN and a new product. Guess I should buy some TiVo stock.
Comcast (at least in the San Francisco Bay Area) does not require professional installation of M-Cards – they hand them to you across the counter at their retail outlets. Nor, at this point, do they charge extra for them if they’re one of your first three devices.
Thanks for the tip Max! I wonder if that’s new. I haven’t heard of too many people given the CableCards for free and self-install. I’m glad they’re doing that. At least where I am, Cox doesn’t trust their customers enough to do it themselves. Maybe Cox will learn how to trust their customers one day.
I’m a TIVO earlier adopter that has become increasingly dismayed at their lack of ability to turn out a new DIRECT TV TIVO DVR. As a subscriber and longterm shareholder, I’m well aware of their divorce and re-unification however their second marriage has been on paper for years and we still don’t have a DIRECTV TIVO receiver.
Nothing like having HD everything and then getting throttled back to SD because my TIVO Series II box can’t support HD.
If this upcoming announcement doesn’t include tangible evidence of a Directv TIVO HD DVR release in 30 days – i’m out! Wake up TIVO and DIRECTV!
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Marin, I’m with you. Started with directv the moment they had a box capable of receiving it. Same with Tivo .. Fist standalone – then on to two hr10-250′s.
I have watched as my monthly cost went up – and the number of HD channels I receive go down … Continuing to subscribe on the promise that a new direcTivo is on the way.
Now – freakin’ tired of waiting and paying for less.
The clock is ticking. I’m beginning to think if what I could do with the freed up 103.00 a month I now spend for directv services — instead of looking forward to watching what my Tivo thinks I might like.
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Followed the link to the engadget screen shots. Just curious – if that is a best buy screen shot, why does it have a warranty on “labour”?
Also I love my Tivo, hate the comcast DVR interface. Long time directtv user.
In Jacksonville, Comcast will happily give you cablecards for self-install and the first one per outlet is free, the second one is $1.50/month. I have two Series 3s with 2 cablecards each, both self-installed (and both required a replacement of one of the two cards, but Comcast was easy to work with).
I’m a long time TiVo supporter and I’m always disappointed that they haven’t taken the world by storm.
At the first CES for DVRs, ReplayTV won “Best of Show”. Ten years ago Replay was letting people share and stream their recorded shows over the internet, schedule shows via web over internet, and automatically blanking commercials. For all these wonderful abilities Replay was sued into extinction bu the TV/Movie companies. Tivo was always their tame, neutered bitch, and so they let it totter along to give the illusion of choice…
Good grief. George, you’re obviously educated and can make good points. Why not try to spell “its” correctly?
All wrong:
* waking up from it’s hibernation
* losing it’s icon status
* In it’s early days
* But tru2way is not without it’s complaints
* past complaints about TiVo is it’s price
* the beta version of it’s new TiVO Search
I have an S1 (analog cable) and an S2DT (analog+digital cable). Living in Toronto I can receive a dozen HD Toronto and Buffalo over the air (OTA) channels using a homemade antenna. But although I love my TiVos, I can’t justify the cost of an TiVo HD for just OTA. Nor can I justify the cost of the cableco HD DVR since I already get half of the HD channels OTA. (And there’s no requirement for Canadian cablecos to support CableCard, so they don’t.) Fortunately I recently replaced my home PC so I bought two ATI HDTV Wonders from eBay and installed MythTV (using my PS3 for playback).
IMHO the standalone TiVo is a dead end as they can’t compete against satellite & cableco DVRs. No matter how bad the interface or limited the function, Joe Sixpack will live with that rather than deal with the complexity and cost of a TiVo. There may be a market for OTA, but it may not be large enough.
Instead, TiVo needs to leverage their IP to get into the satellite & cableco DVRs. Once TiVo gets into those markets, they then can use those subscribers to create additional revenue streams via analytics, etc.
A couple of other notes:
First, I believe TiVo uses an external provider for dialup, so there’s no savings there. (Plus, they’d still need to keep them around to support existing subscribers.)
Second, although TiVo does not currently support HD satellite, the technology exists to digitize component video (see Hauppauge HD-PVR).
I think you are ignoring the elephant in the room, their subscription model.
I never bought a Tivo, and never will, so long as I have to pay every month to use it. I just can’t see paying a monthly fee to use a gadget, when the only service they are providing are TV listings, which are publicly available anyways.
Top of the Rock is not the Empire State Building. It’s in 30 Rockefeller Plaza, one of the buildings of Rockefeller Center.
For techies, home theater PCs (HTPCs) are the TiVo alternative of choice. One can have TiVo-like abilities PLUS Netflix streaming, Amazon.com streaming, Hulu streaming, web site browsing, DVD and Blu-Ray playback, iTunes or other music playback (and associated libraries), video libraries, audio and video podcast playback, and other features that TiVo cannot match at all. And NO MONTHLY SERVICE FEE for programming schedules.
I was a TiVo early-adopter, owning a Series 1, a DirecTiVo and a Series 2.
When HD became popular, many cable companies offered HD DVRs for less than TiVo’s monthly subscription fee plus the cost of the CableCard rental(s).
Say what you want about monopoly and collusion, but this was an effective strategy on the part of the cablecos.
Sure, TiVo’s UI was vastly superior–but money talks. HD DVR for less than TiVo’s monthly cost, with no up-front costs? For most consumers this was no decision at all.
Now, unfortunately for TiVo, the cableco UIs are starting to catch up. Verizon’s FiOS boxes aren’t yet TiVo, but they aren’t that bad. And they still cost less per month than TiVo.
Good Grief and Mikki – Thanks for the grammar and pop culture corrections! Want to be our first copy editor?
JSteele – the complaints about subscription fees are in there:
“… people complain about the monthly fee as being a reason not to get a TiVo…”
I definitely agree that the fees chase away a lot of customers. If they better monetized their service with their advertising and data sales, they should be able to eliminate the monthly fees. But as I also mention, TiVo makes very little money (sometimes loses money) on the box sales. They use the service fees to recoup the lost revenue.
But, if folks are willing to spend $600 to ignore the $250 Apple TV and hack a Mac Mini into a sort of an HTPC, then I think they should also consider selling TiVo’s at a higher, profitable price and eliminating the monthly fee – like Moxi and others do.
Plenty of people use Google – despite the ads that show up in results. Likewise, if TiVo added similarly non-invasive ads in their program guide and search tools, users wouldn’t have an objection (self included)
Provo, UT. Comcast gave me an M-Card for my Series 3 HD XL (lifetime subscription). Even though it’s only one card, they’re treating it as two, since it can do two channels at once. Clever buggars. Still, at the time I was renting two DVRs from Comcast, the second of which cost me about $25/month. I’ll pay the $1.50/month in a heartbeat. Now I’m strongly considering another TiVo and scrapping the Comcast DVR entirely. I never use On-Demand anyway. Guess I’ll decide next week.
I’ll actually lay a fair share of the blame on Michael Ramsay himself (the original founder).
Even back at SGI, I was unimpressed with his attitude towards competition – it was always reactive rather than pro-active. The attitude of \we have a strong niche – they can’t attack us here, so we’re OK, and can just keep on doing business as usual\ seems to have followed him to Tivo, and pervaded the culture there as well.
A company like Apple will aggressively cannibalize its own products year after year, which is why they are so successful with the iPod and iPhone.
When was the last time Tivo replaced a successfully-selling product with something that cost much less and did much more?
Been perfectly happy with Comcast + 3 CCards (2 for Tivo, 1 for RPTV) and I only get charged for a single “dual-tuner” card (actually 2 cards), though they had to be installed and sync’d/validated by an onsite visit.
However, I’m starting to consider ditching cable video entirely and going to downloads, since Comcast is so goddamn expensive. The only way I’ve managed to stay with ‘em this long is by twisting their balls and threatening to go to FiOS to continue promotional rates after they’ve expired..
As for Tivo, they’ve really been stagnant, especially if you compare them to XBMC and Boxee.. Now if I could get a Boxee box with cablecard slots, bye bye Tivo!
(and if they fcuk with 30-second skip EVER, then it’s curtains..)
Tivo is great, BUT I find them to be very very bad at customer service and satisfaction. They get you for a monthly fee and still don’t provide what I would consider much service for that fee. I guess they feel once they have your money and a subscription they don’t need anything else from you. If they cared a bit more about their user base and were more competitive in product and pricing they’d go a long way. I don’t believe they could lose money on their hardware. Hardware is cheap.
Have both a Series 2 TiVo (for office) and Series 3 XL (for home), with lifetime subscriptions. They’re worth it.
But, I’m getting disenchanted: They have a bizarre warranty policy where I have to pay them $50 to exchange a unit. Their software is still buggy as an etymologists’ laborator: Sound/video never quite sync, long delays to start audio after starting video (from 0.5 to 8 seconds!). And customer service is akin to a Chinese laptop vendor’s: “We have your money, what else do you really expect from us?”
I love the concept, the execution is still a bit wanting, and the business is being driven into the toilet because they’re losing customers. Sounds like another Silicon Valley “wanted-to-be” to me, and I’m pissed at them for being so stupid.
Interesting read – I think you missed out on a few things, apart from the subscription model.
The logo – I think this is greatly underestimated. If there’s one category of product that should have an understated logo, it’s boxed electronics – who wants something in their living room in their living room with what looks like a child’s crayon drawing scribbled on it? For sure it doesn’t bother a lot of people, but I feel it has to have held back the device’s mainstream appeal.
It’s US only market – supposedly they are available here in the UK, but I’ve never seen one in my life, or heard anyone say the word “tivo” for that matter. How can they hope to compete when they don’t have a presence in most markets? Searching in google.co.uk, tivo.com doesn’t show up for “DVR” until the 5th page of results, whereas it’s top in the US – this is a reflection of it’s much lower profile here.
TiVo should have licensed their technology in the early 2000s to every cable/satellite company in North America. Allow them to sell their branded boxes, but with TiVo technology embedded. If they were to have higher market penetration, albeit at a lower profit-unit, that would make their advertising data much more valuable.
I would think that TiVo could make more by licensing their OS/Interface than they could with the boxes. I bought a TiVo within the first few months of their intro, but I saw problems with their operation model after a lightning strike blew out the UPS and Tivo and they wouldn’t let me move over the “Lifetime” (the box’s, not mine) subscription and I had to buy a new subscription with the new box we bought. We ran the TiVo for 5 years (or so) before moving to a location without cable and instead of trying to hook up the TiVo to DirectTV we picked a Dish DVR. While the interface is crude compared to TiVo (can’t look for specific genres of actors, etc) it’d cheap and records HD. If I could get the same basic service with a TiVo front-end on it, I’d definitely pay more for that…
In 2003 I bought a lifetime ReplayTV 5040 instead of a TiVo, and I haven’t regretted it one bit. I can still use Poopli to request shows from the net, use a Pace “Digital Adapter” from Comcast via IR Blaster to tune into digital channels (albeit in 480p), and while the Motorola DVR I also have from Comcast has dual tuners and is very nice for recording HD shows, the ReplayTV software is still a generation or two ahead in terms of recording flexibility, and the shows I record on ReplayTV are easily flipped to my LAN via DVArchive instead of being trapped on the box. Best of both worlds!
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I’m also surprised that there’s no discussion about the swamp-like state of software development in the article [if there was towards the end, I apologize...I started to skim].
I read an article in the last year or so that Tivo has little cash flow, so they have cut back on software features, performance, interface innovations, and the like. In the meantime, they have added advertising banners, which are very annoying to at least ‘some’ paying customers.
Personally, I think the performance of the software is quite leaden and bulky, search functions need design improvements, and features have stagnated. It’s sort of pathetic, since this is an easy and obvious differentiator. I’m disappointed – I used to think it was a GREAT product – now, I expect the company to fail.
I have a TiVo (two actually) and one Comcast Scientific Atlanta HD DVR. The Comcast DVR is horrible to program programs. There is virtually no search or preference settings, etc. It is just horrible.
I am surprised you don’t mention what TiVo really missed the boat on. They hold the original DVR “time warp” patent, allowing one to pause live TV. They sued Echostar (Dish TV) and won a $100+ Million judgment, and they were just awarded the patent for season pass recording. Enforcing these patents today is not going to endear them to the cable companies that they should have wooed from the start. However, they now have some leverage with the Echostar precedent.
If they really wanted to grow, they would have made licensing deals with all the cable and satellite companies, not just DirecTV, at one tenth the monthly cost they charge now. At that price, they would have gotten more than 20 times the number of customers, and not had to deal with the high costs of manufacturing, increasing revenue a boat load, and being profitable.
Now what will happen on March 2? Seeing as how Comcast now owns 51% of NBC, which is headquartered at 30 Rockefeller Plaza (not the Empire State building some 15 blocks away) it sounds like some partnership with Comcast and/or NBC is coming. It is not too late to get into all new Comcast DVRs, and my guess is they have struck a deal that will reduce TiVo’s dependency on hardware sales and subscriptions.
PS: TiVo uses shared modem pools from a company called UUNET, one of the original Dial up ISPs. While I agree that the need for modems will diminish, it is not going to save a lot of money by eliminating them.
Here’s my wish list:
*3 or 4 Tuners
*Slingbox functionality for remote viewing
*Streams Hulu as well as TV.com/CBS.com
*Records streaming Internet video from Hulu & Netflix shows for later viewing
*Plays meida files from the home network
*App Store – open the Tivo platform to widgets
*Optional Blu-Ray player
In a fast-paced society it’s easy to forget things like what you believe in and what you’re doing this (whatever this may be) for. Letting words flow out of your brain unedited can introduce you to a part of yourself you’d been censoring from yourself to cope with everyday life. Why did you start down the path you’re currently on? This is an important question whether you consider your current path to have begun on the weekend, or a decade ago.
Discontentment, disillusionment, and unhappiness often come from forgetting why we’re doing something (or, on a different track, not having a good reason for living a certain way) and it is important to keep those simple reasons at the forefront of your mind or you run the risk of letting your life become a series of boring, menial actions.
It’s not only important to remind yourself of your motives for your current actions; it’s important to monitor your actions to see if they align with your life mean well goals so that you can change them. Sometimes, the only way to keep such a close monitor on your actions and goals is to write about them every day.
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Vary Your Themes
Try to capture the day’s events in a single photo. Perform photographic experiments. Take a photo of someone new you meet, something you ate for the first time, or something you just learned how to do. Take a photo of something that made you smile. And don’t forget to take a photo of yourself at least once a month so you can remember how you’ve changed, too.
Tell a Story
Use your blog entry, or your photo description, to explain what’s going on in each day’s photograph. How good did that dinner taste? What made you want to take a photo of that stranger? It’ll help you remember down the road, and itmean well gives friends following along a better appreciation of why you took the photo you did. You don’t need to write a lot, just enough to add some color.
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