We’ve been following Tivo (TIVO) closely. We think the company is a value play on broadband distrubution of content to the home. The current financial trajectory is frightening, but investors have been holding out hope for either an acquisition or partnership that will spur the deployment of more Tivo’s. Tivo just announced a press conference tomorrow that appears to indicate a new partnership.
I’m really hoping for some refreshing news. Tivo is at the vanguard of the digital living room, with over 4MM customers and 1/2 of all deployed DVRs. Even in the face of ‘free’ DVR’s from DirecTV and Comcast they continue to keep loyal customers with a superior software interface and back-end infrastructure.
I’ve noticed a lot of very positive and frank interviews with Tivo execs in the last few weeks. I’ve been bookmarking and comment tagging them on the right side of this blog’s home page- here are two:
- Thomas Hawk’s Digital Connection: CEO Tom Rogers on the Future of TiVo
- Yet another Tivo interview. Something tells me that the timing of all this publicity is not an accident. What is going on?
- Lunching With TiVo’s E. Stephen Mack
- Outstanding interview with meaty Tivo updates
Now it’s clear that some grass roots marketing was going on. People are speculating on a partnership with Netflix. I’m hoping for a partnership with another content carrier, either Verizon/AT&T or an emerging player like Apple or Microsoft. Regardless, I hope it is strategic news.
You can buy Tivo for $125 a subscriber. If you back out the stranded and low-revenue Direct TV subscribers you pay about $300 a subscriber. If each of these customers plugged their Tivo into a broadband connection, you would have the largest installed base of digital-distrubution-enabled living rooms ready to download content.
UPDATE 9:45 AM March 2 2006 Looks like this is an announcement of Tivo KidZone, a feature that allows parents to better control what their kids watch. While this is great for current Tivo users, it isn’t clear to me that this service is going to help win another Tivo subscriber. If parents are relying on technology to control what their kids watch, that’s a problem in itself.
In a lot of ways Kidzone is a bit of a dissappointment for us early adopters who were hoping for a more dramatic announcement from TiVo or at least some sexy new geekware, but in other ways, this is one of the best announcements that TiVo could have made. As much as early adopters love TiVo, the soccer mom is the future demographic for the company. Parents stay pretty busy and time shifting has had a bigger impact on their lives then anyone else. The introduction of kid tested mom approved filtering is one more way that TiVo can differentiate themselves from their competition and one more way that they can attract a more lucrative demographic then the college kids and the early adopters. This won’t end up dramatically changing the PVR landscape, but I think that it definetely will attract not only a few new subscribers, but more importantly the right kind of subscribers.
I was really surprised at how quickly their pre-announcement spread. It’s clear that there is a strong consumer interest in what TiVo does and while I was personally hoping to see a more dramatic announcement, what all the speculation does point out is that TiVo is working on a lot (or potentially could be working on a lot) of different features right now. Some of the speculation that we saw was an early series 3 release, new partnerships with cable companies, advertising developments, Yahoo media plugin’s and what was my personal prediction, the introduction of Mac support for the Tivo to Go. Each of these deals could be growth drivers for the company going forward and the buzz indicates that consumers still expect a lot more then just TV from TiVo.