Tag Archives for TiVo

TiVo on the slide; is this a death spiral?

In TiVo Swings to a Profit posted by The New York Times, it is clear the TiVo continues to shrink. It is a sad day for the small technology brand that could. Subscribers are now at 3.5 million from a peak of 4.4 million. Net subscriber additions are down and have been shrinking all year long.

Net Adds for TiVo Service as reported by tvbythenumbers.com

Net Adds for TiVo Service as reported by tvbythenumbers.com

The cable companies are the major immediate threat and have been, but in the larger context Apple (iTunes), Hulu, YouTube and other similar services are changing the consumption behavior for video content.

See my last post Netflix & TiVo join forces, it does not seem TiVo is positioned well even in the strategies they are employing to get out of this tough spot. It is time to rethink the business model.

The Bottom Line:

TiVo needs to pull themselves out of this death spiral, but it will take grand action not incrementalism. They could become a software and information services provider for the competition (cable and satellite TV providers). Cable companies love to outsource this type of thing and they have been on a whirlwind of deals to work together in wireless communications, advertising networks, and interactive TV initiatives.

Netflix & TiVo join forces

The Wall Street Journal just ran a story on the collaboration between Netflix and TiVo (http://online.wsj.com/article/SB122533284014583011.html).

This is a brillant play by both companies….

For Netflix:

  • Increased distribution to an avid fan base of TiVo users, who are by definition lead technology users (assuming they are not one in the same)
  • Providing a home entertainment device option for streaming content (Apple is looming with their Apple TV solution coupled with iTunes software)
  • Provides a proof point for the satellite and cable companies to deliver their content library

For TiVo:

  • Provides relevance again… the cable companies are really eating their lunch
  • Provides value by association (to something that is cool now) to an avid fan base
  • Differentiation in a commodity consumer electronic space

The bottom line: I think Netflix gets more out of this partnership strategically and could position them as a content supplier “middle man” between the movie studios and those companies that own the living room (e.g. Cable and satellite companies). If Netflix does not capitalize on this though, the TiVo outlet will probably not perform to the level that makes this a breakeven deal.