Can TiVo Really Survive Financially?

microkitty · 09-13-2006, 10:19 PM

I love my TiVo service and can't believe anyone would tolerate the terrible user experience of cable DVR. We sing "duh-doop, duh-dee" with glee in our household. And now I have bought the Series 3 will transfer my "lifetime" subscription.

But the big question is, whose lifetime??? Mine? The new TiVo box? Or TiVo, Inc.? I have buyer's remorse already.

TiVo's revenues are increasing, but slowly. Losses are decreasing, but slowly (only lost $34M last year, gulp). They don't have a lot of cash. I hear they are doing another stock offering. Not everyone's favorite stock pick.

TiVo has completely failed to protect their branding. Everybody knows about TiVo, but no one knows how to distinguish Tivo (tm) from other similar offerings. I was reading slahdot and people are talking about "tivo" this and "tivo" that, when mostly they mean DVR on some other platform. TiVo has consistently failed to capture what is different about their combination of hardware and software and put it into a message for the normal person. Yet any normal person who called their cable provider would happily accept their far cheaper "tivo" service (really a crappy Motorola DVR). And that's a shame: the whole (real) TiVo experience is vastly better than any alternative.

And now, they (finally) offer the new Series 3 for a price only suckers like me are willing to pay. There cannot be that many of us. And even if they reduced the price by half, this is still a big expense. And then, add the monthly service! (And for me $3/month for the CableCards).

I'm a software engineer so am predisposed to a certain aggravation with marketing departments. But I just gotta say, WTF TiVo -- get a message out there and show people how much better TiVo is. Spend the money. Fight the cable guys. Or make a deal with some devil (Microsoft, ComCast comes to mind). Or hell, OpenSource the software and and the hardware spec and resell the service through the cable and satellite companies. Something. Business model, anyone?

I feel better now.

Tom

megazone · 09-14-2006, 04:38 AM

Any popular product enters the lexicon - Kleenex, Xerox, Google, etc. The fact that people use TiVo whenever they talk about DVRs is because TiVo is *the* brand. There is not one thing TiVo can do to stop it. They DO fight it in the press, etc, but they can't go after individuals who do it.

TiVo has already done deals with DirecTV (even if they're moving away from TiVo's software, there is still revenue, and the ad partnership is seperate), Comcast, and Cox. They've successfully sued Echostar for patent infringement and they protect their IP. It isn't like they're doing nothing.

Monty2_2001 · 09-14-2006, 05:12 AM

The S3's cost is the problem, it's really stunning. You can get a Dell Core 2 Duo for about the same, albiet with a smaller HD. But HD's are cheap now, real cheap.

I'm having a hard time figuring out where all the cost is going on this unit. The HD stuff is nice, but hardly unique. The dual cable card tuner, again nice but c'mon. And the OLED display is also nice.

The really weird thing is that pcmag Heron's review says that they basically lifted the software more or less directly from S2, even causing distortion and low resolution.

On something that costs more than many PC's, I find that hard to accept.

ZeoTiVo · 09-14-2006, 05:21 AM

Quote:

Originally Posted by Monty2_2001

The S3's cost is the problem, it's really stunning. You can get a Dell Core 2 Duo for about the same, albiet with a smaller HD. But HD's are cheap now, real cheap.On something that costs more than many PC's, I find that hard to accept.

an 800$ Dell duo core does not include the hardware to record tow digital HD channels at once. Add in the hradware to record two channels at once and you are well above $800. Look to do HD on that dell and you need to wait for cablelab certification or do OTA which is also more added cost.

megazone · 09-14-2006, 07:05 AM

Quote:

Originally Posted by Monty2_2001

The really weird thing is that pcmag Heron's review says that they basically lifted the software more or less directly from S2, even causing distortion and low resolution.

Which is weird, because I, Dave Zatz, CNET, and other reviewers DID NOT see that. I really suspect the unit was misconfigured and set for 4:3 output on a 16:9 display.

classicX · 09-14-2006, 08:04 AM

Quote:

Originally Posted by microkitty

I was reading slahdot and people are talking about "tivo" this and "tivo" that, when mostly they mean DVR on some other platform.

I'd expect Slashdotters to know the difference. Check the user numbers, probably very high.

Quote:

Originally Posted by ZeoTivo

an 800$ Dell duo core does not include the hardware to record tow digital HD channels at once. Add in the hradware to record two channels at once and you are well above $800. Look to do HD on that dell and you need to wait for cablelab certification or do OTA which is also more added cost.

Um... it doesn't cost Tivo $800 to make, much in the same way the Dell duo core doesn't cost Dell $800. Tivo sells S3's to Best Buy for $500, and we can reasonably assume that Tivo is still making a small profit on these sales, albeit probably slim. The box probably costs Tivo between $400 and $450 to manufacture. This is why the lifetime transfer offer is on the table and allows only for purchases from the VIP Tivo site - it guarantees them between $350-400 profit on the box, plus another $200 (minus the cost of the free year or service for the other box). If you buy from BB, they are making only $50-100, plus the $12.95 per month.

If someone offered you $650 or $100, which would you take?

bidger · 09-14-2006, 11:07 AM

Quote:

Originally Posted by megazone

Which is weird, because I, Dave Zatz, CNET, and other reviewers DID NOT see that.

Inaccurate quote, Monty. Robert was talking about how the icons look in the menu system, created for 4:3 and stretched to 16:9. It's the same way on the HR10-250. It rates a BFD for me because I don't spend an awful lot of time in the menus. I imagine it could be revised in an update.

SeanTivo · 09-14-2006, 02:44 PM

Quote:

Originally Posted by microkitty

TiVo's revenues are increasing, but slowly. Losses are decreasing, but slowly (only lost $34M last year, gulp). They don't have a lot of cash. I hear they are doing another stock offering. Not everyone's favorite stock pick.

Tom

Tivo's balance sheet shows plenty of cash. $90 mil plus I believe. The secondary just generated another $66 mil.

I just hope they use the cash to hire some people to produce products in less than a lifetime.

The business side of the house is kicking ass and signing deals left + right. The engineering side of the house is slow as molasses.

Has Ramsey been fired yet?

smak · 09-14-2006, 09:26 PM

1999 - yes
2000 - yes
2001 - yes
2002 - yes
2003 - yes
2004 - yes
2005 - yes
2006 - yes
2007+ - yes

-smak-

thwart · 09-14-2006, 10:09 PM

Bottom line: Tivo needs to innovate and cross-over into other industries to keep the money coming in. The cost of making this Series 3 is too much and they will only end up losing money on the product in the end.

Tivo has opened the doors with the SDK for third parties to create software that can take advantage of the Tivo platform, but Tivo doesn't really sell this idea very well. Can I write some software for Tivo and sell it? I know I can write software for it, but I don't know that I can sell it.

Would it be in Tivo's best interest if third parties could write and sell software for the Tivo platform. Yes.

Would it bring innovation to the platform. Yes.

Cable companies are selling dvr's that can record two high-def channels at once right now. Other than a terrific interface for the usual DVR functionality and the not-so-terrific interface for the extra features, I don't see what Tivo is doing to go way beyond what the cable companies are doing.

Tivo has the potential to change the way we are entertained! They could be the ones that force the cable/satelite companies to bend over instead of the other way around.

Tivo should be the creative force that forges a new industry and standards for developing and delivering the entertainment content of the future.

Come on Tivo people! Remember when it was just you and those two guys over there and that funny janitor that used to laugh when he smelled popcorn? Said it made him feel funny in the way-back-there. Remember that one time when the four of you thought that this whole thing could really turn into something? Remember when the janitor killed a guy?

...

Any hoo, what I'm trying to say is you've lost your edge. Find it!

sonicboom · 09-14-2006, 10:59 PM

Quote:

Any hoo, what I'm trying to say is you've lost your edge.

As much as I hate to agree with that statement.... I do.

I had tivo back in 1999, sold it in 2002 (because I was moving). I figured by the time I got settled into my new house, tivo HD would be available. It wasn't. It took four more years. I bought a couple replayTVs in the meantime to hold me over. The interface wasn't as nice, but they were reliable, and could stream video between themselves and computers long before tivo could. Tivo eventually caught-up, and was able to make replaytv irrelevant, and had something to offer that generic DVRs didn't have.

Then they remove those very features from the S3... a major setback. I realize there are other forces at play here (CableLabs), but it doesn't change the fact that they lost some major features which set them apart from the generics.

The tivo interface is still state of the art, but that's hard to sell. It's the feature set which gives you the edge in the eyes of the masses, and they are now much closer to generic then they used to be.

eisenb11 · 09-15-2006, 02:05 AM

Don't forget the zillion dollars Tivo is going to be wringing out of Echostar...

zalusky · 09-15-2006, 05:15 AM

Quote:

Originally Posted by microkitty

I love

TiVo has completely failed to protect their branding.

Tom

Then why did they win the lawsuit against Dish and why did DirecTV renogitiate a 3 year partnership shortly after it was cleat TIVO was going to win that lawsuit.

They protecting their Brand and IP.

Marketing is expensive but you cant accuse them of sitting around.