Okay I'm going for the stupid question of the month award...

3559 Views 30 Replies 15 Participants Last post by bonscott87, Jul 31, 2007

trex527

Discussion Starter · Jul 26, 2007

As you guys can tell I'm a newbie here so there's alot that I gotta learn and what not but I have done research at this forum and found answers to many of my questions minus this one here...Why couldn't tivo and directv come to some kind of understanding and make a updated HD reciever that supports mpeg 4 and all the other techno babble that's out here?It seems that the people who has supported D* and tivo are the ones who's gonna get the short end of the deal.If anybody can answer that please feel free and thanks in advance.

1 - 20 of 31 Posts

Redux

· #2 · Jul 26, 2007

trex527 said:
As you guys can tell I'm a newbie here so there's alot that I gotta learn and what not but I have done research at this forum and found answers to many of my questions minus this one here...Why couldn't tivo and directv come to some kind of understanding and make a updated HD reciever that supports mpeg 4 and all the other techno babble that's out here?I seems that the people who has supported D* and tivo are the ones who's gonna get the short end of the deal.If anybody can answer that please feel free and thanks in advance.

The current ownership of DirecTV has made a decision they are not going to retreat from, no matter what. Obviously there are members of the current management whose careers are pegged to that course. New ownership is coming in. Some observers feel DirecTV is so far down the wrong path it will not be economically feasible for the new ownership to fix it.

A big variable is the perception of what will happen after the current agreement between Tivo and DirecTV, which precludes Tivo from suing DirecTV as they have done Echo*, expires. The new ownership of DirecTV may place significant value on being able to operate without that looming threat of litigation.

ebonovic

· #3 · Jul 26, 2007

Now from the YANG side of it (Yin and Yang)....

3+ years ago, a decision was made by the DirecTV Group to not persue another generation of DirecTiVo units... but to bring it "in-house" and build it themselves.

What factors went into that decision... no one here in the public forums knows all the details. Anything that is said is speculation on their part, or a reposting of someone else's speculation.

Other the press release announcements:
-) DirecTV is going to "build" a non-TiVo powered
-) TiVo and DirecTV extended their service agreement (and the include the patent dispute clause)

That is all that has ever been OFFICIALLY stated.

---------------------
There are multiple "theories" on why they split:
-) Nurdock didn't like TiVo, Inc
-) DirecTV wanted to keep the ~$2 per subscriber, per month royalty they were paying to TiVo
-) TiVo wanted to much $$ to build the system DirecTV wanted
-) TiVo didn't want (or couldn't) include some features DireTV wanted in the next generation product

There are a few others, but those are the 4 main ones.

As for which are correct... again, no one except for those involved in the decision making process know for certain.
------------------------------------------------------------

Now for a response to some of Yin's points...

"Big Variable" is the perception of what will happen, when the agreement expires.
Let's see...

Do you really think DirecTV, who has a legal force probably on par with the one at Microsoft, would agree to a contract/agreement... that would basically say:
... We won't sue you "now", but we reserve the right to recoup costs and sue you at a later time....

How would that look in the public sector to anyone trying to work out a deal with TiVo, Inc.
Even if it is for licensing of patent technology... Do you think DirecTV would spend 10's if not 100's of millions of dollars developing their own DVR... only to knowling open themselves up to lawsuits in 2011?

No one here has ever posted the exact legal document, so none us know EXACTLY what dictates... only what we saw in the press releases, and corresponding articles.

-------------
There are observers here that think Liberty and the new ownership will "undo" what has been done... and abandon the DirecTV DVR+ platform for TiVo again... or even yet, spend what ever it would cost to support a 2nd DVR platform again.. (A model that didn't work well the first time they tried it)

Most of those same people, have stated their dislike for the "other" platform...
And even some of those have stated there can "never" be anything as good as a TiVo.
And even then some of those people still will not even acknowledge that there are people who don't like TiVo... and people just "accept" what they coin... an inferior product.

IMHO... there is a reason why, you don't see carrier after carrier, signing up to partner with TiVo... and go at it with their own DVRs. There are reasons why it has taken almost 3 years to get the Comcast-TiVo out there (At it still is not there)... The COX TiVo is no where to be found....

My guess it is some of those EXACT same reasons on why, there will be no "return" of TiVo to the DirecTV system. The only plausable way I see TiVo returning to DirecTV.. is if the parent company of DirecTV Group... purchases TiVo, Inc...

See less See more

Redux

· #4 · Jul 26, 2007

ebonovic said:
Now from the YANG

And not an unreasonable YANG at all.

I'm curious about the ~$2. Not arguing, just interested.

Of the $5-$10 per month DirecTV was charging its customers for Tivo service (depending on time period) my understanding was that DirecTV was skimming off all but about $1.15 per month. I don't remember ever seeing a knowledgable estimate anywhere near $2. Your DirecTv sources are ... ahem ... better than mine. Are you sure of that $~2?

Eited to add: BTW my information was that DirecTV gave Tivo zero, as in $0.00 per month of the mirroring fee for additional Tivo receivers. Do you have a different number for that as well?

kepper

· #5 · Jul 26, 2007

trex527 said:
...It seems that the people who has supported D* and tivo are the ones who's gonna get the short end of the deal.If anybody can answer that please feel free and thanks in advance.

I believe that some pretty extensive customer research of D*'s customer base has been done and shows that the majority of DVR users could care less if they are provided with a TiVo interface or some other type, as long as it works and is fairly simple to use, and is reasonably inexpensive. I was involved in some research of this type (not for D*) and many people think that all DVR's are called TiVo and could care less about feature comparisons. Thet want to record and playback TV shows, and skip commercials. They have few expectations beyond that, and many actually consider some of the more sophisticated search features as potentially confusing and complex.

Many people on this forum are definitely not representative of the general population, in that they understand the technology and have a set of expectations on how the equipment should perform. Some also seem to be totally dedicated TiVo customers. They (we) are a small portion of the total population that D* sells to. For the vast majority of D*'s customers and potential customers, they care less about the interface or the brand, as long as it works.

So, that being the case, then D*'s mission is to find the most cost-effective DVR they can buy or make, that gives them a competitive advantage over cable boxes. I assume that staying the course with TiVo wouldn't deliver that solution, which is why they went to a different user interface for both HD and standard def DVRs.

See less See more

nrc

· #6 · Jul 26, 2007

ebonovic said:
Do you really think DirecTV, who has a legal force probably on par with the one at Microsoft, would agree to a contract/agreement... that would basically say:
... We won't sue you "now", but we reserve the right to recoup costs and sue you at a later time....

How would that look in the public sector to anyone trying to work out a deal with TiVo, Inc.
Even if it is for licensing of patent technology... Do you think DirecTV would spend 10's if not 100's of millions of dollars developing their own DVR... only to knowling open themselves up to lawsuits in 2011?

Actually, it's pretty clear.

Further, we agreed that neither party would assert its patents against the other party with respect to each companys products and services deployed prior to the expiration of the agreement, subject to limited exceptions.

(link)
The agreement covers only products and services deployed prior to the expiration of the agreement. So TiVo can't sue DTV for the HR20 in 2012, but they could sue them for any DVRs or DVR software released after the agreement expires.

This "nobody really knows why DTV and TiVo split" crap is disingenuous. You know as well as anyone that DTV/Murdoch made a very clear choice to bring everything under their control with their own branding and the money going in their pocket.

RS4

· #7 · Jul 26, 2007

I'm sure there are more political reasons then technical as to what is stopping a new Tivo unit for satellite. Tivo has just come out with another version of an HD product, and has proven in the past that it has the techo knowhow to develop the product.

I think the one ray of hope that we Tivo lovers have is that both companies have (or shortly will have) new management structures then were there when the companies parted. Hopefully that will be the difference maker.

Tivo's new box is looking a lot more attractive to me. I like the idea of getting videos from the net like the Amazon offering. My guess is that a few years down the road when broadband speeds are increased significantly for a lot of the US market, we'll see a huge amount of video offerings that we'll want to take advantage of. The beauty of Tivo with the stand alone box is that they are free to pursue opportunities that a cable/satellite company may not be able to.

If Tivo ever came out with a satellite offering, I hope they aren't as restricted in the feature set as they were in the past.

See less See more

ebonovic

· #8 · Jul 26, 2007

nrc said:
Actually, it's pretty clear.

(link)
The agreement covers only products and services deployed prior to the expiration of the agreement. So TiVo can't sue DTV for the HR20 in 2012, but they could sue them for any DVRs or DVR software released after the agreement expires.

This "nobody really knows why DTV and TiVo split" crap is disingenuous. You know as well as anyone that DTV/Murdoch made a very clear choice to bring everything under their control with their own branding and the money going in their pocket.

While they "could" sue for anything built AFTER 2012, that is still another 5 years away.... An doesn't cover the products release over the last 2 years already, and anything released in the next 5...

As for the "disingenouous"

Do we know for a fact what TiVo was asking for in an extension? or new contracts? Do we know if what DirecTV wanted for THEIR product, TiVo could do or couldn't do in the time frame they wanted.... no... we don't know any of that.

Or is it always going to be big bad DirecTV and Murdock, that forced the TiVo product out?

And why should a company want full control over their products?
I mean after all... it is THEM they are going to call when there is problems?
It is THEM that have to take the heat when something isn't working...

Even look now with the 6.2 releases for the HR10-250... not many blame TiVo... they blame DirecTV... when DirecTV didn't write the software.

See less See more

ebonovic

· #9 · Jul 26, 2007

Redux said:
And not an unreasonable YANG at all.

I'm curious about the ~$2. Not arguing, just interested.

Of the $5-$10 per month DirecTV was charging its customers for Tivo service (depending on time period) my understanding was that DirecTV was skimming off all but about $1.15 per month. I don't remember ever seeing a knowledgable estimate anywhere near $2. Your DirecTv sources are ... ahem ... better than mine. Are you sure of that $~2?

Eited to add: BTW my information was that DirecTV gave Tivo zero, as in $0.00 per month of the mirroring fee for additional Tivo receivers. Do you have a different number for that as well?

DirecTV only charged $4.99, then $5.99 for TiVo service.
The $9.99 was for Ultimate TV.

If $1.15 is a more accurate dollar amount, then cool... I said ~$2 as I knew it was around the $2 mark, but didn't have the exact figure handy.

DVR fees where setup 1 DVR fee per account... per what ever agreement they had setup with TiVo.. (IIRC, the Ultimate DVR, it was $9.99 per... but I could be wrong on that as I didn't have one.)

And if it was $1.15... then that makes it even more of the "case" that it wasn't about the "money" they were going to save. $13.80 per subscriber... per year...
And that is excluding grandfathered lifetimes and premium account holders...

That is a very small amount, to use to recoop the R&D costs of a new DVR system.

TiVo Inc, received ZERO from the additional mirroring fees.

See less See more

stevel

· #10 · Jul 26, 2007

Please note that the "mirroring fee" has nothing to do with TiVo. That's the standard fee DirecTV charges for any additional receivers, DVR or not. What TiVo got was a portion of the "DVR Service" fee, which was $4.99, now $5.99, but that is paid once per account, no matter how many DVRs you have on it.

HiDefGator

· #11 · Jul 26, 2007

ebonovic said:
And if it was $1.15... then that makes it even more of the "case" that it wasn't about the "money" they were going to save.

It is always about the money. I believe Tivo started off getting around $1.25 per sub but as more subs were added the amount dropped to around $.84 cents per sub today.

Even at a $1 a sub per month that would have been a huge amount once DTV gets DVR's into the hands of every customer they have. Easily over $100 million a year they would have been handing Tivo. If they can't design, build, and maintain their own DVR for less than $100 million a year they shouldn't be in business.

The bottom line is DTV is saving millions by going in house rather than offering DTivo's.

jkast

· #12 · Jul 27, 2007

Did the division of Murdock's empire that builds DVRs move to the new owners of DirecTV? If not, then I would guess that Tivo has an opportunity if the fit is otherwise right.

Jonathan_S

· #13 · Jul 28, 2007

ebonovic said:
DirecTV only charged $4.99, then $5.99 for TiVo service.
The $9.99 was for Ultimate TV.

Actually it started out at $9.99, then dropped to $4.99 before later rising to $5.99.

(But that was back when standalone TiVos were $9.99/month as well)

nrc

· #14 · Jul 28, 2007

ebonovic said:
While they "could" sue for anything built AFTER 2012, that is still another 5 years away.... An doesn't cover the products release over the last 2 years already, and anything released in the next 5...

According to Tivo's 10K the agreement actually ends February 15, 2010, less than three years from now.

Do we know for a fact what TiVo was asking for in an extension? or new contracts? Do we know if what DirecTV wanted for THEIR product, TiVo could do or couldn't do in the time frame they wanted.... no... we don't know any of that.

No, we don't know any of that. We know that DirecTV had a specific strategy to bring everything in-house where possible. Occam's razor makes the rest of the "we don't knows" irrelevant.

Or is it always going to be big bad DirecTV and Murdock, that forced the TiVo product out?

And why should a company want full control over their products?
I mean after all... it is THEM they are going to call when there is problems?
It is THEM that have to take the heat when something isn't working...

I'm not placing a moral judgement on their business plan. They want the same control over customers and revenue sources that cable enjoyed for years. My objection to that is from a customer perspective. One of the reasons I went to DirecTV (and USSB) in the first place was the choice they offered. Sadly the worm has turned on that front and now cable is the place to be if you want your choice of equipment.

RS4

· #15 · Jul 28, 2007

Why would you ever want to cut off a segment of your customers like DirecTV is doing with the Tivo users? What's wrong with having an tow brands compete? Why if nothing else doesn't direcTV license the mpeg4 technology and let Tivo have there own product? Those of us who like Tivo would then have a choice. Or why doesn't DirecTV charge a premium for a Tivo mepg4 HD box and let us get our support from them?

There are plenty of scenarios that could take place that would offer benefit to for all of us, but that takes the parties wanting to make the relationship happen. Now with both companies soon to be under new management then when the breakup was announced is a good time to revisit the market place.

I can't see why both companies wouldn't want to try to expand their markets. It's clear DirecTV has stumbled with their try at a replacement product, so why not look for other opportunities instead of trying to force us into a product a lot of Tivo customers don't want?

See less See more

lancelot

· #16 · Jul 29, 2007

Well put. Directv, bring TIVO back! The HR20 doesn't even rise to the level of a poor imitation.

bonscott87

· #17 · Jul 29, 2007

RS4 said:
Why would you ever want to cut off a segment of your customers like DirecTV is doing with the Tivo users? What's wrong with having an tow brands compete? Why if nothing else doesn't direcTV license the mpeg4 technology and let Tivo have there own product? Those of us who like Tivo would then have a choice. Or why doesn't DirecTV charge a premium for a Tivo mepg4 HD box and let us get our support from them?

There are plenty of scenarios that could take place that would offer benefit to for all of us, but that takes the parties wanting to make the relationship happen. Now with both companies soon to be under new management then when the breakup was announced is a good time to revisit the market place.

I can't see why both companies wouldn't want to try to expand their markets. It's clear DirecTV has stumbled with their try at a replacement product, so why not look for other opportunities instead of trying to force us into a product a lot of Tivo customers don't want?

You still don't understand the simple answer to this: There just isn't enough people that will only use a Tivo product to matter. It's really that simple. If the number was really high, let's say 200,000 users will leave if there is no Tivo. Again, they sign up that many new subs in a couple months or less. *WHY* would they spend tens of millions for those 200,000 subs?

*That* is the question you have to ask yourself and you need to take your emotion out of the equation. It's all about the bottom line. And it doesn't add up to spend millions to satisfy a very small segment of their user base.

Hey, I'm all for bringing Tivo back as an option so long as it doesn't slow down their other initiatives. But it just doesn't make economic sense no matter how you put it.

RS4

· #18 · Jul 29, 2007

We really don't know the economics involved in this decision, but I'll play your silly game. Multiply 200,000 times 1000 and what do you get $200 million. It won't cost anywhere near that kind of money to upgrade one of the Tivo or DTivo boxes to include HD meg4 support.

You say DirecTV will only lose 200,000 in this example, but in fact it will be a whole lot more. Why - because a happy customer is going to bring other customers to that vendor. I know that I brought 7 customers to DirecTV because I loved the Tivo. The counter to that is also true. A guy in my office was thinking about DirecTV and after talking to me decided to forget it and stay with Comcast for now.

Earl likes to mention about the support issues, but the fact remains that DirecTV already has a support group that works with the Tivo unit, so it shouldn't cost much more for this group to learn another box in the series.

This business case is ripe or review - by both companies. Tivo has different leadership then when Murdoch threw them out. We now that Murdoch will not be in charge much longer. DirecTV's replacement box is not enjoying a good reputation - especially from the Tivo crowd. Tivo has just come out with their 3rd HD product so they are getting more mature in their knowledge. I'm guessing the the HR10-250 was developed by both companies so that means a new box would have a technology update, but not a complete re-write.

Even without knowing the economics of why the split occurred, the previous decision points more towards egos instead of economics. Now, with new leadership, the decision to end the relationship should be revisited.

See less See more

bonscott87

· #19 · Jul 29, 2007

Okey dokey. Check back in a year and we'll see.

kepper

· #20 · Jul 29, 2007

RS4 said:
You say DirecTV will only lose 200,000 in this example, but in fact it will be a whole lot more. Why - because a happy customer is going to bring other customers to that vendor. I know that I brought 7 customers to DirecTV because I loved the Tivo. The counter to that is also true. A guy in my office was thinking about DirecTV and after talking to me decided to forget it and stay with Comcast for now.

As I mentioned in a previous post, I have done quite a bit of market research into consumer preferences regarding DVRs for another company. In my opinion, there are three main reasons why D* is highly unlikely to see several hundred thousand defections over the lack of future support for the HD TiVo:

1. Content is king. When D* rolls out dozens of HD channels in the next few months, there will be very few subscribers that will have a similar option from their cable company. Even if they are TiVo lovers, they are highly likely to stay with D* for the content, especially since D* says they plan to offer it at no additional cost. Over 98% of the people I researched subscribe to DBS for content, picture quality, or total cost of ownership. The DVR choice was very low on the list, except for the storage capacity of the DVR; people wanted higher capacity products.

2. There are very few DBS subscribers that are so wedded to the TiVo interface that they will refuse to use competing solutions, especially since the choices available to use TiVo are so limited (cable) and require a significant capital outlay of several hundred dollars plus a monthly subscription to TiVo plus the subscription to their content provider and the challenges of cable card interface with their equipment. In short, its too big a hassle for most people.

3. People have a strong propensity to stay with existing providers. Many will stay because there isn't a better choice available (I am one of those). Others will stay for the increased HD content (I am also in that category). Some may stay hoping that D*'s new ownership will re-engage with TiVo (in my opinion, hell will freeze over first). Probably the majority will stay with D* because switching is always a hassle and if the D* solution works reasonably well, they will soon get used to the new interface. (We have the best politicians that money can buy because people hate change- "better the devil I know than the one I don't").

So I think that D* is going down a path without TiVo for business reasons that indicate that growth and subscriber rates can be met in the future without TiVo. I believe they are correct as has been evidenced with their results after over a year's worth of non-TiVo SD offerings, but only time will tell.

See less See more

1 - 20 of 31 Posts

This is an older thread, you may not receive a response, and could be reviving an old thread. Please consider creating a new thread.