Wednesday, May 26, 2010

Can Tivo Survive As A Stand Alone Box?

Tivo announced its first quarter results and the news was plainly bad. Its deal with Comcast has not blossomed. Other cable companies have yet to license their technology. The courts stayed the Dish ruling and other patent fights are years away from resolution. So what is a company with a great product suppose to do?

Well one deal announced is with best Buy, but surprise, it is not to about its DVR capabilities. "The latest adopter is Best Buy, which will add the TiVo platform to its Insignia house brand of HDTVs at an unspecified date. (The exact phrase is “development is underway.”) Unfortunately, the press release announcing the deal explicitly states that the sets will be using the 'latest TiVo non-DVR software and advanced television service.'”

Will this business model offset the core revenue losses? Will Comcast, Time Warner and others recognize the value of the Tivo software and embrace it into the box? Doubtful. Most likely, they will do an end around. Use web software on mobile and wireless devices like the iPad, laptop, and mobile phone to provide a remote scheduling process that provides all the flexibility, ergonomics, and ease of a web page and then talk to the headend which in turn will program the home's DVR box. Search, recommendations, highlights, and colorful marketing on devices we have made invaluable in the home. Then the choice simply has to be "programmed" to record at the head end and updated in the home machine. And so no need to embrace the Tivo technology at the home set top box.

Can Tivo adapt to this type of future. Can they write the software that runs the engine at the headend. That it seems could be the next home run.

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