Not satisfied with contributing to the demise of the television industry, TiVo -- the company that invented the time-skipping digital video recorder (DVR), the set-top device that empowers TV viewers to "zap" or fast-forward through 30-second commercials -- is now unleashing its creative/destructive storm on the Internet.
Last week, the Silicon Valley based TiVo Inc. (Nasdaq: TIVO) -- in alliance with the German software company, Nero -- launched an online version of its DVR called TiVo PC. This TV tuner that can be plugged into a PC will be available in the U.S., Mexico, and Canada Oct. 15; $199 buys you a full year’s service with an annual renewal fee of $99.
All this raises a host of questions:
Does the arrival of the TiVo PC set-top box represent the final convergence of television and Internet video?
What will be the impact of TiVo's new device on the online video economy?
Will TiVo be remembered as the company that helped slaughter the advertising golden goose that has enriched the broadcasting industry for the last 50 years?
The TiVo PC isn't the company’s first foray into uniting the online and television experiences. In July, for example, TiVo announced an alliance with Amazon.com Inc. (Nasdaq: AMZN), which enabled its 4 million U.S. subscribers to buy books, CDs, and DVDs directly from onscreen menus on their TVs. In March, TiVo launched an arrangement with YouTube Inc. by which its high-end Series 3 and HD subscribers would be allowed direct access to YouTube’s video content on their TVs. Given, however, that only around 3 percent of YouTube content currently comes with pre-roll advertising, it isn’t entirely clear what the real benefit of time-skipping technology is for TiVo subscribers wanting to watch YouTube videos on their TVs.
Earlier this year at "All Things D" TiVo's outspoken CEO Tom Rogers predicted that "Like it or not, it's 'game over' in terms of forcing people to watch commercials." With TiVo PC, a product that really represents the full convergence of TV and the Internet, Rogers is doing some fast-forwarding of his own with that prediction coming true.
It is particularly disturbing that the TiVo PC set-top box has been launched just as promising video channels like Hulu.com (3.2 viewers in June, according to Nielsen) and ABC.com (2.9 million viewers in June) are finally reaching their tipping points. All the video content on both these sites is free, all comes with pre-, mid-, and post-roll advertising, which, inevitably, will be skipped by the 50 percent of TiVo users who use their DVRs to avoid commercials.
So, if the DVR revolution spells game-over for forcing people to watch online commercials, then how are sites like ABC.com or Hulu.com supposed to finance their high-quality, curated content? Certainly not with the false panacea of product placement advertising in television content, which actually dropped 15 percent between the first half of 2007 and 2008. Unfortunately, then, a product like TiVo PC might well up end up spelling game-over for an inchoate online video business dependent on advertising revenue for its survival.
So what is TiVo's ultimate business goal with this convergence product? I did contact TiVo to learn more about its intentions, but -- surprise, surprise -- they never got back to me. So I'm left to speculate on these intentions for myself. On one level, of course, TiVo is simply trying to sell as many packages of $199 hardware and $99 software packages as it can.
But I wonder if there’s another, more sinister explanation here as well. In the summer of 2006, TiVo launched a research division designed to aggregate and then sell the data of how its millions of subscribers viewed commercials using their traditional television set-top boxes. TiVo PC will, of course, provide much richer and more intimate details of user behavior than does the company’s television product. As television and the Internet converge, perhaps we should imagine TiVo as the big brother of the emerging online video industry, a data mining company with treasure chests of valuable information about all of our Internet viewing behavior and preferences.
— Andrew Keen, Silicon Valley author, broadcaster, and entrepreneur
My piece was about the impact of advertising skipping technology on media -- whether that's tv or the Internet. My fundamental concern is giving users the technology that enables them to skip ads -- thereby killing the content industry. Whether that's TiVo or Nero really isn't the core issue. You are using technology to ignore the key issue here -- how are we going to build a viable online video economy is nobody will pay for content and nobody will watch the ads...
My piece was about the impact of advertising skipping technology on media -- whether that's tv or the Internet. My fundamental concern is giving users the technology that enables them to skip ads -- thereby killing the content industry. Whether that's TiVo or Nero really isn't the core issue. You are using technology to ignore the key issue here -- how are we going to build a viable online video economy is nobody will pay for content and nobody will watch the ads...
I want to reinterate TivoUser's comments that you have totally misread the Tivo PC press release. If you want to count Tivo PC as competition for internet streaming of TV shows like hulu, then you'll also need to count standard Tivo hardware (as well as DVR boxes from Comcast, Dish and DirecTV), DVD recorders, VCRs and even plain old TV sets.
But your misread of the press release goes even further. Do you know why you didn't get any comment from Tivo, Inc. about Tivo PC? I don't have any inside information here, but a careful reading of the press release strongly implies that Tivo PC is not actually a product of Tivo, Inc. It is a product of Nero, a long-established maker of media software for PC.
How about this more likely scenario: 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! 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, making it easily recognizable to consumers familiar with the popular Tivo brand name as well as removing the responsibility from Nero of running high-uptime servers for guide data, web scheduling, etc. Clearly this strategy has worked because they are getting a lot of publicity that they wouldn't have gotten for just another PC DVR product.
Ok, does that make more sense than the conspiracy theory that you wove?
Andrew, you clearly misunderstand the concept of what TiVo PC is and is not. It's simply TiVo on your PC versus on a TiVo box, that's it. It's not for recording and playing back video streams over the Internet and then for skipping their commercials! It's just Tivo without the need to buy an entire TiVo box.
So I wonder how you think it would take a TV Tuner and software to allow users to now skip online video commercials from any of thousands of online video sources? What does a TV Tuner enable or have enything to do with online video distribution? Have TiVo figured out a way to record, store and playback these streaming formats? Have TiVo hacked Flash DRM and expect to get away with it? No! All Tivo can do is act like a browser with a Flash Player installed... in other words act like a PC! That's nothing new there or in any sense a convergence.
Don't get me wrong, I LOVE TiVo and have owned many since 2000. There's a market for TiVo PC I guess and they will indeed gather more info to resell and sustain their business as they should, but this is not a revoltion and Hulu will sleep easy tonight.
TiVo's starting to look and act more like Google in its ability to amass loads of usage and behavioral data and spin it into... well, I was going to say gold, but I'll leave it at revenue.
What's more exciting to me here is the continued erosion between broadcasting and the Internet. It's high time more DVRs and stereo receiver boxes came standard with USB and Ethernet ports built in. Talk about "game over," and not just for media companies reliant on ad dollars to survive.
I agree about the streaming frustrations, and your post makes me wonder why no "legitimate" companies have figured out how to play WITH bittorrent and the others instead of against them.
And I do agree with Andrew that data mining is what TiVo thinks will make its fortune. And one more thing: I love my Roku! Watching on the TV is still a good experience -- much more social than on a PC. (Yes I have a big-screen monitor, but it's at work, not at home!)
s..tr..e..a...m..in....g v..id....e..o is hardly "high quality"... if you can't download something with decent resolution, it's a joke, not a show.
The answer I'd like to see is torrent rss feeds, either per series or per channel ala what miro and others are starting to support. I'd prefer subscription based for the good stuff, but for those who can put up with ads, you could buy credits with ads or something.
Tivo is hardly the death knell to tv though --- I haven't watch commercials since I got a tv with a mute button on the remote. In fact, with my tivo, I watch way more than I ever used to, as I can watch it on my schedule, not theirs. TV's problem is there's just way more to do now than there used to be, or at least it's easier to find the things to do and people to do it with.
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