Tuesday, August 5, 2008

Will the Network DVR Kill Tivo?

The court reversal enabling Cablevision to move ahead with a network DVR has many repercussions. For one, it will enable more homes to take advantage of the DVR capability. And while that may mean more fast forwarding through commercials, technology is already adapting to overlay ads through the various trick features. Network DVRs make this ability easier to manage and more opportunity to adapt the ad message to individual households.

It may also affect consumer purchase decisions to acquire a Tivo box; as its core feature is being replicated. For Tivo, this court reversal was probably expected; they have been working on more download opportunities using their box as an interface to the web. In addition, their superior navigation capability may be something Cablevision might want to partner with to maximize the usefulness of their network DVR device. Tivo has also embarked on an e-commerce strategy with Amazon.

Network DVRs remind me of the direction computer software is also taking. Devices, connected to the web, utilizing centralized business software and sharing data inside network drives. Devices have been dumbed down as network computing allows more sharing and easier exchange of information. It is no surprise that a network DVR approach would follow this trend.

"If the legal process -- which could potentially include taking the dispute to the Supreme Court -- were to eventually permit network DVRs, the ramifications for the TV business could be significant, noted Sanford C. Bernstein analyst Craig Moffett, who called Monday’s decision a 'huge win for cable operators.'” In the short run, Cablevision may still have to wait to proceed with the network DVR; but precedent has been set with Time Warner's Start Over and Look Back and its other network advance services. So all speed ahead with Network DVRs. It is the direction we are headed.