News Item: The latest on Tivo

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TIVO COULD BE LEFT BEHIND BY DEEP-POCKETED RIVALS
By Sam Diaz, Mercury News
http://www.mercurynews.com/mld/merc...66.htm?template=contentModules/printstory.jsp

When Oprah Winfrey, known for having a Midas touch, sang the praises of TiVo last year, the company's stock shot up more than 10 percent over a few days.

When DirecTV said earlier this week that it had sold its stake in the San Jose company, the stock plunged more than 14 percent within hours.

There's no doubt that TiVo pioneered a technology that inspired a loyal following. It revolutionized television viewing by giving users of its set-top box the ability to pause live television, record programs to a hard drive and watch them later -- zipping past commercials as they watch.

But TiVo, the company, is a different story.

Since its founding in 1997, the company that pioneered the digital-video-recording market has never made money. Today, questions are mounting about whether it will be left behind as a niche player in a market that's quickly filling up with giant, deep-pocketed competitors.

"TiVo has a great brand name, but the bigger question is how can they monetize that brand name?'' said Alan Bezoza, an analyst with Friedman Billings and Ramsey in New York.

The cable- and satellite-TV companies -- which can sell DVR upgrades to an established base of customers -- are rolling out their own DVR services, some of them licensing the technology of TiVo's rival, Digeo.

TiVo has its own big partner in DirecTV, the satellite-TV service controlled by Rupert Murdoch's News Corp. That partnership has helped TiVo increase its subscriber rolls to 1.6 million today, which may lead the industry. (About 900,000 of TiVo's subscribers come through DirecTV and 700,000 through TiVo's own stand-alone, branded service.)

But confidence in TiVo's ability to hold onto its biggest partner -- DirecTV -- is wavering. DirecTV sold its 3.4 million TiVo shares, and DirecTV Vice Chairman Eddy Hartenstein resigned from TiVo's board earlier this month.

Although both companies said the partnership agreement -- which runs through 2007 -- will not change, the sharp slump in TiVo's stock points up how vulnerable the company's fortunes are to the moves of the big players.

What's more, TiVo so far hasn't signed up a major cable partner -- key because cable reaches so many American households.

Brodie Keast, senior vice president at TiVo, said the company is moving forward on several fronts to achieve profitability by the end of the year. He points out that TiVo subscriptions continue to grow and the company continues to pursue another major partner, specifically a cable-TV provider.

"We'd love to have a cable deal, but we're not going to bet our life on that,'' Keast said.

Meanwhile, competitors keep increasing their presence.

Dish Network, the satellite-TV provider owned by EchoStar -- which is closest to TiVo in number of subscribers -- continues to grow by offering a free DVR service to premium customers. News Corp., which has a controlling interest in DirecTV, also owns NDS, a European software company that competes with TiVo on DVR technology.

And cable companies, which never really saw TiVo as a must-have, recently have stepped up their own efforts in DVR.

That's where Digeo, a Palo Alto company that recently landed deals with three of the country's largest cable-TV providers, comes into the picture. Charter Communications is rolling out Digeo service in several markets and Comcast and Adelphia are testing it around the country.

Digeo sells Moxi, an all-in-one set-top box designed to deliver programming, connect to the home computer and serve as a DVR.

Digeo CEO Jim Billmaier said the company decided early on to concentrate on cable-TV systems and not market itself as a stand-alone brand-name product the way TiVo does.

Billmaier said that marketing its own stand-alone service as well as selling to the cable companies ``creates conflicting goals.'' He added: ``We don't want Digeo and Moxi to be the upfront brand. We want to be like the `Intel inside.' We think the bigger brand name is Comcast.''

But TiVo is trying to move forward on its own, upgrading its stand-alone service by stepping up its premium offerings to compete with some of the other players.

Analysts say there will always be customers who want to pay for the extras that come with TiVo. David and Tamra Chavez of San Jose, for instance, were happy with their DVR service from Dish Network -- until they saw the DirecTV-TiVo box of David Chavez's parents and decided to switch.

"It has a lot of bells and whistles that Dish Network didn't. And I'm totally willing to pay for them,'' said David Chavez.

As TiVo follows a two-pronged strategy through partnerships as well as its stand-alone service, it remains an open question whether the DVR pioneer will be run over by the powerhouses.

Steve Shannon, a former executive at TiVo rival ReplayTV, said he has stayed clear of the big cable and satellite companies as he prepares to launch Akimbo, a San Mateo company that plans to offer foreign-language content over the Internet.

"It's a tricky business model when you're dependent on people like the cable operators and satellite operators,'' he said.

"I think Replay and TiVo both pioneered the whole prospect of a hard disk being next to the TV. But as it happens so often with the pioneers, the big gorillas follow on and then the challenge becomes whether the pioneers can hold on to some of their position.''

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Wonder if they're not marketing directly to consumers as much as they should. How can a product that -- once experienced -- you can't live without, fail? Bad marketing? Mismanagement? Bad timing? Bad luck?

I'm a very happy DirectTivo user...

 

TIVO is a big deal now. I would have never have guessed people would use it instead of a VHS machine, but there you go....

 

The problem is, I don't think enough people are using it instead of a VHS machine for the company to start making money from it....

Evan

 

I've seen this coming for two years. The future isn't in stand-alone, it's in integrated.

This is also happening with PDAs, which will largely disappear and be replaced by PDA functionality in phones.

The good thing for Palm is that they've managed to get into the embedded/integrated market by licensing their OS. The bad thing for Tivo is it looks like they are being pushed out of the embedded/integrated market.

FYI, I've owned two Tivos for about four years.

 

I hope so. Most find their user interface superior to every other PVR, including ReplayTV, which I also own.

A friend here ordered a Scentific Atlanta PVR from Time Warner and returned it the next day. His reason? "That's not Tivo"

 

This is funny because I just saw a new DirecTV/Tivo HD unit in a magazine. Looks nice! I have 4 DirecTV TIVO units and I use them all every day. I was one that never thought I would change from VHS but I can't remember the last time I actually used one (and I have 4 of those too)

 

I dunno. I have no use for Tivo. Can't see paying for it. My VHS works just fine and dandy. I don't watch that much TV, and I can usually catch it live.

 

That's what I thought at first too. But Tivo really has changed the way we watch TV around our house. I couldn't live without it now...

 

I hear that, but in this day and age where all TV shows come out on DVD and I can watch them at my convenience if I want, and the fact I don't watch too much tv, I don't see the point in paying X dollars a month for the service. Makes zero sense to me.

Guess I enjoy doing other things like music (playing, composing, arranging), hanging out with friends, etc., more than I value my TV watching habits

 

Wow, trashing TV watching in a Tivo thread. You win the highly coveted Thread Crap of the Day prize!




ps That band you like really sucks.

 

I see TIVO sells at BestBuy for about $149 bucks these days.

Is it better to just wait for my cable company to come out with a DVR (should be this Fall) with a HDTV box also in it? Also DirectTV will be offering one very soon with their HD sat box.

 

Reams have been written about why Tivo has not prospered, and sadly, I think their future is in doubt. Cable wants to go their own way. D*TV may have their own DVR via Murdock, and Dish has got their own thing as well.

Doesn't leave a lot of room for growth, really.

As someone said, its one of those things that, once you have it, you can't imagine not having it. Of all the gear in my rack (HD satellite, DVD-A, SACD, DVD....) the Tivo is the ONLY thing that my wife could NOT live without. If I tossed Tivo, I would be a single man very quickly.

I consider Tivo my Google for TV. Lets you find all kinds of interesting stuff that you would never have known was on. I have friends that have said the same thing as Styx; they don't watch much TV. The reason for that is without a Tivo, it virtually impossible to cut through all the crap and find stuff thats worth watching.

In their fight with cable, I also see price as a big, big impediment. Even $150 is hard to swallow vs. free. And the monthly fees are cheaper with cable.

The comments I have read say that cable DVR's are lame approximations of Tivo, but there seems to be no effort out their to show consumers the difference, such that the understand why they need to pay for the box. A shame, really.

As for their HD D*TV box, I would love to have it, but $1K is just too much for me right now. And they have gotten slammed a bit for not making it compatible with cable system (no RF tuner, just D*TV and ATSC). Not an issue for me, but I understand the gripes.

BGL

 

We got DirecTV and TiVo a few years ago and it is a great combo! We have the premium package, so the TiVo service is free. I rarely every watch anything live anymore, news sports, shows, etc. It can be a real time saver. Most hour shows are actually about 35-40 minutes without the commercials. Show up 45-60 minutes into a sporting event, zip through all the ads and it tends to end about the same time as the actual game.

I upgraded the HD, so we can save a ton of programming on it. I use to have a bunch of VHS tapes to do the same thing. Now it is all hands free. We recorded and saved all the 24's this season and watched them over the course of week or so after the season ended.

 

Monthly fees for what? The DVR charge for a DirecTV receiver w/ TiVo is $4.95 a month, the fee is waived is you sub to their highest programming package, and if you add another D-TiVo to your acct. you only pay the same add'l mirroring fee that any DirecTV sub would pay who adds another receiver, $4.99 a mo. I'm gonna guess that they standard cable fee would be $6.95 a mo. and I seriously doubt you'd get a break on another DVR.

I wouldn't pay the $150 anyway even if there were a BB in my immediate area since by calling DirecTV I can get one for $99 installed and the $99 can be spread out over my monthly programming payments. I bought my first D-TiVo in Mar. 2001 and paid Lifetime (option no longer available for D-TiVos) for $199. I've upgraded the capacity on both units that I own, I'm sure cable would LOVE me doing that to their boxes. So cable is offering this option now, why would I have wanted to wait on them? It's been my experience to date that the majority of innovations have been offered to my first by DirecTV.

 

Sorry Bill, but I think you are talking apples and oranges. My point was Tivo for cable vs. Cable DVRs.

You are comparing the D*TV Tivo costs with Cable DVRs.

My point is that a Tivo that works with cable is by definition a SA Tivo. Not sure what the monthly is now, but I am thinking its $10 or better, or fork out a life time service fee (~$300 or so, IIIRC).

Unless I am mistaken there are no SA Tivos for $99.

I certainly agree that D*TV Tivo fees are cheap, and the box can be had for $99 or less, so D*TV w/Tivo vs. Cable/DVR would be comparable.

BGL

 

OK. I thought the post you were quoting from was about D-TiVos for $150. Since you were talking SA TiVo, then you're correct; it is apples vs. oranges. Sorry for misreading.

 

Government gives nod to new TiVo feature

Looks sweet...

If TiVo can put SD/MMC card slots in its hardware, even better!

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Government gives nod to new TiVo feature
Posted on Wed, Aug. 04, 2004
http://www.mercurynews.com/mld/mercurynews/business/technology/9319144.htm

WASHINGTON (AP) - Federal regulators on Wednesday approved technology allowing TiVo subscribers to send copies of recorded shows over the Internet.

The idea was opposed by Hollywood and pro sports teams who believe it will lead to mass redistribution of movies and games. But in its unanimous decision, the Federal Communications Commission said there are enough protections already in place to prevent that.

TiVo Inc. allows subscribers to digitally record shows off their televisions. The new technology would allow a subscriber to download those broadcasts to their computer and then send copies of recorded shows to their offices, homes, or from different rooms within a home. A recording could also be sent to a few friends as long as they are on the subscriber's registered account.

The technology has drawn fire from the Motion Picture Association of America, the National Football League and major league baseball. They claim that TiVo users can redistribute shows over the Internet to virtually anyone, anywhere.

The technology that TiVo asked the FCC to consider recognizes ``broadcast flag,'' which the agency approved in late 2003. The flag is an electronic signal that tells DVD recorders and other devices to encrypt shows when recording to prevent distribution over the Internet.

TiVo officials said that means movies and sports broadcasts can't be sent to mass audiences.

In afternoon trading on the Nasdaq Stock Market, Tivo shares were up 15 cents, or nearly 3 percent, at $5.26.