The CEO of Tivo, Tom Rogers (earlier post here), announced yesterday that Tivo may give away its DVR's for free with a long term subscription. What was the market and industry reaction? Yawn.... Why is that? It's because Tivo is unfortunately no longer a market or thought leader. When was the last time someone talked about their Tivo? It's a big change from being featured on sitcoms ("My Tivo thinks I'm gay) a few years ago, and where users like me were bragging about how cool this service was.
Why the changes?
- Tivo hasn't kept up with the technologies - there is still no stand alone dual tuner box (can watch 2 shows at once) and still no High Def box, leaving the opening wide for the cable and satellite companies to pitch their superior offerings.
- The cable and satellite firms have redoubled efforts to address the category after ignoring it for the first couple of years - the bundled offerings give users fewer boxes and are easier to set up.
- News Corp's DirecTV unit, responsible for 2/3 of all 4M Tivo subs, has started to sever ties with Tivo in order to very aggressively push its own DVR's. Tivo doesn't have any real control over its existing DirecTV subs, so its actual addressable customer base is much smaller than what it first appears.
- The better Tivo software and user interface hasn't improved all that much in the last few years, allowing competitive services to get closer in functionality and appearance. Although Tivo is probably still better, it's not $5-10 a month better...
- Which is why its announced deal with Comcast to offer Tivo as a premium DVR option no longer is attractive as it first seemed since the market has caught up with them. I just don't believe that even a small percentage of users are going to choose to pay an extra fee to download the Tivo interface to their Comcast box.
- Finally, some of the really cool offerings with the Tivo2, such as the ability to offer extra functionality through the box like movie tickets and Tivo-to-Go portable content, haven't taken off due to either better alternatives or a lack of applicable portable hardware.
So what's the future? Not much, unless Tivo can protect its IP with a win in its lawsuit against DISH/Echostar, which would then presumably be followed by additional lawsuits and possible settlements. A year ago I would have thought that they would be an attractive acquisition for a variety of companies, but I think they're instead just sliding into irrelevancy - Comcast would seem to be the most likely buyer, but I suppose any set top maker, such as Cisco, would be interested as well.