TiVo is sitting at the base of a mountain of opportunity. IPTV is catching on and growing fast. Shows like DiggNation have real sponsors now. ABC and CBS are putting content online. The direction of video is clear.
TiVo already has boxes in homes today. They already have software running on PCs networked to those TiVos in the home. TiVo, it is time to make it happen!
First, you need a new version of TiVo desktop. It needs to be able to handle reading RSS feeds and have bittorrent functionality. If you are worried about people downloading copy protected content illegally, make the software so that it only talks to Trackers that TiVo controls.
When people want to be able to push content down to TiVos (think RocketBoom today or see how people watch DiggNation on their TiVo through Bittorrent, VLC Player, and Galleon for a better idea), they register the content with TiVo. TiVo takes the torrent file and hosts the tracker. TiVo would use the HMO functionality to pull a list of shows off the server. This RSS file would give a description of the show and have all the download details for each episode. TiVo Desktop would parse this file into a pretty page to display to the user on the TiVo. If the user subscribed to the show, TiVo desktop would grab the torrent file for each episode of the show and start downloading. Since it is bittorrent, the users share the bandwidth to get the show downloaded. TiVo would not have a large traffic charge. The more popular a show became, the more copies there would be already downloaded (seeds, in the bittorrent terminology) for others to download quickly.
Today, we are stuck with MPEG2 and its massive file size. With TiVo 3, the new codecs make these even more feasible.
This would all be step one - a free service to get new, original content to the viewers through TiVo and TiVo alone. TiVo would be hailed as a champion by the independent video and film arena.
For step two, the business plan kicks in. Once TiVo has proven the technology and worked out the bugs with the free content, the next step is a subscription model where people buy a subscription to the show. This fee would be added to their monthly fee and thus give TiVo increased cash flow. Since there would be little technology cost on the front-end and no significant increase in network bandwidth costs once it is running, this money hits TiVo pockets first. In a monthly or quarterly deal, Tivo could cut checks to the content providers.
For step three, I would find a way to allow TiVo customers to opt-in to ad-supported options for the subscriptions. The customer gives demographics about themselves on the TiVo website. Advertisers provide content based on the demographics, likes/dislikes, keywords, etc. These commercials would be downloaded and take up maybe 15 - 30 minutes of drive space on the TiVo. As the user watched a show they subscribed to, TiVo would insert commercials from the hard drive at the prescribed breaks. If the user pressed thumbs down, the commercial would be deleted. There would have to be a limit on thumbs down to keep them from rejecting every single commercial.
On the other hand, if they pressed thumbs up, TiVo could email them more information and a URL to the advertisers website.
If TiVo could get step one in place by the end of this year, I would expect to see the stock prive double as the ads start hitting the streets talking about TiVo as the ultimate source for video.