TiVo Struggles to Find Its Niche After Quitting a Deal with Cable

After months of hard bargaining, TiVo reached an agreement last summer to offer its pioneering video recording system to customers of the Comcast cable system, according to several people involved in the discussions.

It was potentially a critical deal for TiVo, because Comcast is by far the biggest cable system and also because control of DirecTV, the satellite system that has been the biggest distributor of TiVo, had been bought by the News Corporation, which also owns a TiVo rival.

Yet, at the last minute, Michael Ramsay, TiVo’s chief executive, decided to pull out of the deal. Comcast was not going to pay TiVo enough money or give it enough control over its service, Mr. Ramsay told the company’s board, according to people involved in those discussions.

A mildly upsetting article if true. Once you walk away from an opportunity like that they generally are gone for good. Even if they would’ve gotten very little from the deal, it would’ve put ‘TiVo’ into many homes, and kept some *other* solution *out*. Which is perhaps more important.

TiVo has said they can survive without DirecTV because the overall financial benefit of the deal isn’t really that large a part of their income, but it is still income and my understanding is it is still a profitable business. So it is upside.

But, the possible missed opportunity aside, there are a few interesting nuggets in this article.

His plan – called Tahiti – involves several technological innovations intended to let TiVo thrive without the cooperation of cable companies. Devices will be able to send recorded programs to personal computers and to download programs from the Internet as well, taking advantage of a standard mandated by the government that, in theory, would allow TiVo to directly connect to cable systems. Also, he said TiVo would move beyond video recorders to a broader product line involved in the convergence between computers and television, including software that would allow a home computer to record television programs. This would put TiVo into direct competition with other companies, like Sony, Hewlett Packard and Microsoft.

OK – TiVoToGo (and ‘TiVoToComeback’, as even TiVo employees have been calling it, such as at CES (moving content from a PC TO a TiVo – yes, it is coming)), CableCARD, broadband content, etc. But I think this is the first time I’ve heard any mention of TiVo releasing software for a PC. A lot of people have said they’d buy something for that, or asked questions like “Why doesn’t TiVo release their interface for the PC I own?”, etc. Interesting.

In the past I have said that I could see TiVo doing what Palm did – Palm split into PalmSource – which licenses the OS, and PalmOne – which builds Palm branded HW. I could see TiVo doing the same thing – divorcing the SW and HW businesses, and licensing their SW for other vendors and platforms more widely. I mean, they already do that now, but, like Palm, it is a mixed relationship – since they license the OS to vendors like Pioneer, Toshiba, and Humax, but also compete with them on store shelves with TiVo branded units.

(Article originally spotted via PVRBlog)

About MegaZone

MegaZone is the Editor of Gizmo Lovers and the chief contributor. He's been online since 1989 and active in several generations of 'social media' - mailing lists, USENet groups, web forums, and since 2003, blogging.    MegaZone has a presence on several social platforms: Google+ / Facebook / Twitter / LinkedIn / LiveJournal / Web.    You can also follow Gizmo Lovers on other sites: Blog / Google+ / Facebook / Twitter.
This entry was posted in TiVo. Bookmark the permalink.
  • tricia_rva

    wasn’t there some talk about tivo doing some sort of deal with netflix? Considering there are sites like movielink.com that let you download movies and watch them for a 24 hour period, It would be awesome if through netflix you could download stuff then send it to your tivo… oh I can’t wait for something like that!! woo hoo.

  • megazone

    Yes, TiVo and NetFlix have a preliminary agreement and are expected to have a trial sometime in 2005. At CES there was some info on what they plan to do with broadband content delivery, as well as the ‘Tahiti’ project.

    I posted a slew of announcements from the show, and I’ve been meaning to write up a few odds-and-ends that I didn’t post yet.