TiVo Is Going the Wrong Way

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Is "My PC really gets me" the new marketing slogan at TiVo (Nasdaq: TIVO)?

TiVo is teaming up with multimedia disc-burning software specialist Nero to put out Nero LiquidTV / TiVo PC next month, allowing computer users to have the same TiVo functionality on their systems as couch potatoes do with conventional digital video recorders for television.

Available for $199 with hardware goodies like a TiVo remote, tuner card, and wireless connectivity -- or $99 for the stand-alone software version -- a hit product would mean juicy, high-margin revenue streams in the future. The solution includes a year of TiVo service, but loyalists will have to be renewed annually at $99 a pop.

Why would consumers pay up when cheaper workarounds are plentiful? Well, this is a TiVo-branded solution, complete with TiVo's programming guides and patented usage features. Websites like Google's (Nasdaq: GOOG) YouTube, Hulu, and Joost have proven that consumers have warmed to online video. Now it's time to see if Aeron potatoes are willing to put their money where their mouths are.

Yes, it seems as if TiVo is going the wrong way here. Web streaming specialists like Amazon.com (Nasdaq: AMZN), Netflix (Nasdaq: NFLX), and Apple (Nasdaq: AAPL) have created hardware solutions to feed their Web streams into your home theater. Amazon's response, actually, is through TiVo. Netflix teamed up with Roku for its set-top gadget, while Apple tries to find a niche for its rare dud in Apple TV.

Is this a rare step back for TiVo? It has teamed up with popular websites to bring over PC features -- like streaming music through RealNetworks' (Nasdaq: RNWK) Rhapsody, playing YouTube clips, or going shopping with Amazon -- on TV, and now it wants to go back to the computer?

I don't think so. TiVo is still doing a growing number of cool things in the living room. It is leading the way in computing convergence. However, TiVo apparently realizes that the information superhighway goes both ways here. It wants to matter at both points in the migration journey.

I'm not going to hold my breath on this. I think it will appeal to just a thin sliver of the computing audience. Tethering computer users to one more service contract also couldn't come at a worse time, given the soft economy. However, there's nothing wrong with TiVo attempting to grow in several directions at the same time. It may or may not "get me," but it does get the value of incremental revenue streams.

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Comments from our Foolish Readers

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  • On September 29, 2008, at 3:48 PM, oddvan wrote: Report this Comment

    Title of this story is silly and just to grab clicks.

  • On September 29, 2008, at 3:56 PM, ely95125 wrote: Report this Comment

    I think it's in tivo's best interest to try and expand its ip, which is software. It's much the same dilemma that Apple has had in whether it should focus on the software and maybe license the SW to run on other hw. HW is expensive and i'm sure if tivo can increase it's TAM it is a good thing. As long as people enjoy the experience. I just recently came back to tivo after using a cable company DVR for 3 years. I like the UI and features. it's unfortunate that they are hampered by cablecards that don't allow on-demand or SDV capability. I think that they are doing a pretty good job of improving features like T2go and viewing web videos. I think if they incorporate functionality like slingbox it'd make it far and beyond what you could do on a lot of other systems. Watching TV streaming (like or recorded) on your iPhone is a pretty cool thing, and they are on the verge... They are on the cliff of success and need a few things to come together to push them over...

  • On September 30, 2008, at 2:56 PM, linda2844hh wrote: Report this Comment

    I'll tell you why TIVO really IS going the wrong way. About 3 months ago I bought a Series 2 Tivo tuner, believing it would allow me to record one channel and watch another. Not so! You can't do that if both channels are digital. So as of Feb 2009, this tuner box will not even do for me what I can get a VCR to do; that is, watch one channel while I record another.

    TIVO is completely aware of this and yet continues to sell the dual tuners to unsuspecting consumers. After 30 days of ownership, you can't return or upgrade your tuner either, so I've just paid for what will be a $200 doorstop.

    TIVO is losing me forever!

  • On September 30, 2008, at 6:34 PM, collinong wrote: Report this Comment

    You are looking at this from the wrong perspective. It's not Tivo that is doing this, but Nero. Look at it this way and it makes much more sense:

    Nero had this idea to make their DVR software into a standalone product, but it's already somewhat crowded with pay and free solutions (SageTV, BeyondTV, Windows MCE, MythTV, GBPVR, etc.) so how can they differentiate their product? Latch onto the most recognized PVR brand name, Tivo! As you have pointed out, this product doesn't seem to make a whole lot of sense strategically for Tivo, but that also means that it doesn't hurt them to license their user interface and guide service to Nero for use in a PC DVR product. They get some subscription revenue and maybe some customers for their hardware products if people get annoyed with the maintenance required on a PC. They are already running the servers anyway so a few more data users wouldn't hurt. Nero gets to promote this a Tivo for PC and pass off the responsibility of running high-uptime servers for guide data, web scheduling, etc. Clearly this strategy is working already because they are getting a lot of publicity that they wouldn't have gotten for just another PC DVR product.

    What remains to be seen is how deep the Tivo software goes. Did Nero just restyle their menus with Tivo's overrated left-right hierarchical menus or did they actually port the entire code base so that multiple season-pass recordings will prioritize the same way, cut off show overlaps the same, etc. I'm guessing the former, surface level only. For example, nothing is mentioned about interoperability with Tivo hardware like streaming between units.

    I also wonder if they took the lamest parts of the Tivo software and interface, for example:

    - crazy annoying menus that won't even let you wrap around from the top to the bottom and vice versa

    - forcing everything into this hierarchy that forces way too many keystrokes to get to other places in the menu structure, or even to just delete a show.

    - pause buffer limited to 30 minutes

    - no scheduled recording markers in the program guide

    - no ability to look into the recent past of the program guide (was there a new episode of Fringe tonight? dunno, you can't go back an hour or two in the guide to see if there was)

    - must copy the show from unit to unit rather than streaming it (actually, since Nero's sw makes no mention of interoperability from pc to pc or pc to standalone unit, this won't be an issue)

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