I See TiVo's Future

How tough has it been to be a TiVo (Nasdaq: TIVO  ) shareholder? This tough.

And it's not about to get easier. Chip industry trade magazine EE Times yesterday reported that chipmakers are working to introduce a new television receiver that would make it possible to pause live TV using flash memory.

No one knows when the technology, dubbed Pause TV, will debut, but EE Times reports that a prototype will be shown next month at the IFA consumer electronics trade show in Berlin. If true, Pause TV could make its way to our shores by the holidays, or early next year.

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Would that harm TiVo? It's possible. Privately held Magnum Semiconductor has come up with a chip-driven design that could store up to 60 minutes of video at full DVD quality -- double that, for the lower resolution of standard analog TV.

But that's just one application. Another potential Baby Breaker, Mobilygen, expects Pause TV to be available via flash drives, DRAM (otherwise known as computer memory), and hard drives.

A hard drive in your TV? Why not? Computer manufacturers have long been drawn to the boob tube. Adding a hard drive to a television is just a step away from what they've already done.

Think about it. Dell (Nasdaq: DELL  ) sells TVs. Apple (Nasdaq: AAPL  ) has Apple TV. And Microsoft (Nasdaq: MSFT  ) is making the flawed-but-interesting Xbox 360, with its massive hard drive and built-in DVD player, a Trojan horse in the battle for the living room. Everyone has a stake.

Putting the "duh" in DVR
Especially TiVo. No company short of the now-defunct Radio Corporation of America (RCA) has done more to transform television than TiVo has.

Why, then, shouldn't it lead the next wave of TV design? Pause TV may be interesting, but as my Foolish colleagues Rick Munarriz and Alyce Lomax pointed out to me when we discussed this last night, it's lightweight compared to TiVo and its (mostly) patent-protected innovations.

Pause TV won't let you record movies. It won't let you search for and record your favorite shows. And, worst of all, Pause TV may do nothing to keep you from bad Old Spice commercials. In short, TiVo is a way to customize your viewing experience, while Pause TV might simply make for more less-stressful bathroom breaks during the ballgame.

Fast-forward to a better TV viewing experience
Nevertheless, I love the idea of making the TV smarter than it already is. TiVo does that today with a box. But it couldn't be reduced to a chip and a hard drive? I don't see why not.

And it's not like TiVo is inexperienced at embedded design. The Comcast (Nasdaq: CMCSA  ) version of the cuddly digital video recorder made its debut at this year's Consumer Electronics Show.

Right now, Pause TV isn't much of a threat to TiVo. But that's only because the technology is in its infancy. Once TV makers like Sony (NYSE: SNE  ) announce their intent to try it out, it's game on. Don't wait for that day, TiVo. Come up with your own design. Give us the TiVo TV. Do that, and it'll be game over for Pause TV.

Dell and Microsoft are recommendations of the Motley Fool Inside Value service. Dell is also a Stock Advisor selection, while TiVo is a former Stock Advisor pick. Try either newsletter free for 30 days by clicking on the appropriate link. There's no obligation to subscribe.

Fool contributor Tim Beyers didn't own shares in any of the companies mentioned in this article at the time of publication. Tim's portfolio holdings can be found at his Fool profile. His thoughts on tech stocks may be found in his blog. The Motley Fool's disclosure policy is recording this article.


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