Friday, Mar 19, 2004
Everyone's been posting Jim Louderback's premonition of TiVo's death like it's the Gospel, and so I feel compelled to tell you exactly why Jim (a reporter who's been naysaying the TiVo for years) is wrong, and that punchy three-word headlines don't equate to a balanced market analysis.
The simple reason TiVo will live is because TV is intimate. People want ownership of their experience, and they want ownership of the resulting media. This is exactly the opposite of what cable and satellite companies want.
Of course TiVo as a standalone appliance will fade away as Decoder-PVRs become common, but they'll grow into three other markets: The referenced cable/satellite set-top boxes, DVD-R burning hybrids, and as an integrated component of television sets. Two of these hybrids are already on the market (DirecTiVo and two different DVDiVos) and the third, Toshiba and Phillips TVs with integrated free 'tivo lite' will be here by Christmas.
Saying that Cable-PVRs will squash TiVo is like saying that cable squashed the VCR, when in reality it made it much stronger. For all the benefits that a cable PVR has (that it seems cheaper because the cost is built into your monthly charge), there's no content provider in the world who would ship a device that would record to DVD, and no network that would deign to be included in a service that did.
Recording to a DVD isn't as easy as recording to a tape, and this is where an integrated 'export this show to that disc' solution really shines. If you're going to buy a DVD anyhow, the incremental cost of adding PVR functionality is a gimmie. And yes, within the next 4 years it will be an incremental cost.
TiVo is source independent. Cable, satellite, bunny ears or closed-circuit TV, TiVo is your box. As each content provider has their own proprietary system, if you change providers, you have to change systems, a shift as big as switching from Mac to Windows. Oh yeah, and your shows are gone, too. It's content lock-in, and it's one of the big reasons Dish Networks wants you to use their box, so leaving their fold is more painful, even when they suddenly drop CBS, MTV, Comedy Central and Nickelodeon because of a contract dispute.
As long as content providers carry copyrighted material on their networds, they'll be hobbled by the demands of organizations like the MPAA and Viacom who will use all the leverage they have to inhibit the end user's ability to export to any portable digital media. Standalone PVRs and in-TV PVRs are farther outside their control, and as that control is flexed, PVR customers will flock to these options.
TiVo-in-TV, which Sony plans to market later this year, is another gimmie. It will provide a free 3-day window to the future, with an inexpensive up-sell to season pass functionality. The TV-TiVo-DVR box is probably about 24 months away.
Jim's main point is that TiVo will fail because the costs of enteing the market and delivering product are dropping rapidly, but this is likely why they'll succeed. TiVo will never be a Yahoo or other conglomorate, but they will become a platform standard with a steady revenue stream. When prices fall uniformly, users flock to the best solution, not the cheapest. Getting PVRs into peoples hands cheaply, on the backs of other products is exactly why the market will succeed, and when the market succeeds, TiVo will likely be at the top of it, based on product quality.
True, you won't have to buy a $299 box for your parents to bring them the light, but when you see the glow in their eyes, talking about the magic recording TV they bought at Best Buy last month, you can bet it'll have a little guy with two antennae and no arms stickered onto the remote.
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