Has TiVo's Fate Been Sealed?

ChipGuy writes "Things are getting bleak for TiVo, reports the New York Times, and adds that TiVo blew a major opportunity to team up with Comcast. And that might have cost CEO Michael Ramsey the job. Om Malik writes that 'The fate of TiVo also highlights the dilemma facing a lot of "exploding TV" start-ups. The technology does not necessarily translate into profits and a business,' and breaks down the financials -- over half a billion dollars in losses so far. PVRBlog adds that 'When the story of TiVo is written, this Comcast negotiation could be the point when the company's outcome was decided.' More reactions here."

Comments

Netcraft confirms

[Anonymous Coward]

It is official; Netcraft confirms: Tivo is dying

One more crippling bombshell hit the already beleaguered Tivo community when IDC confirmed that Tivo market share has dropped yet again, now down to less than a fraction of 1 percent of all servers. Coming on the heels of a recent Netcraft survey which plainly states that Tivo has lost more market share, this news serves to reinforce what we've known all along. Tivo is collapsing in complete disarray, as fittingly exemplified by failing dead last [samag.com] in the recent Sys Admin comprehensive networking test.

You don't need to be a Kreskin [amdest.com] to predict Tivo's future. The hand writing is on the wall: Tivo faces a bleak future. In fact there won't be any future at all for Tivo because Tivo is dying. Things are looking very bad for Tivo. As many of us are already aware, Tivo continues to lose market share. Red ink flows like a river of blood.

FreeTivo is the most endangered of them all, having lost 93% of its core developers. The sudden and unpleasant departures of long time FreeTivo developers Jordan Hubbard and Mike Smith only serve to underscore the point more clearly. There can no longer be any doubt: FreeTivo is dying.

Let's keep to the facts and look at the numbers.

OpenTivo leader Theo states that there are 7000 users of OpenTivo. How many users of NetTivo are there? Let's see. The number of OpenTivo versus NetTivo posts on Usenet is roughly in ratio of 5 to 1. Therefore there are about 7000/5 = 1400 NetTivo users. Tivo/OS posts on Usenet are about half of the volume of NetTivo posts. Therefore there are about 700 users of Tivo/OS. A recent article put FreeTivo at about 80 percent of the Tivo market. Therefore there are (7000+1400+700)*4 = 36400 FreeTivo users. This is consistent with the number of FreeTivo Usenet posts.

Due to the troubles of Walnut Creek, abysmal sales and so on, FreeTivo went out of business and was taken over by TivoI who sell another troubled OS. Now TivoI is also dead, its corpse turned over to yet another charnel house.

All major surveys show that Tivo has steadily declined in market share. Tivo is very sick and its long term survival prospects are very dim. If Tivo is to survive at all it will be among DVR dilettante dabblers. Tivo continues to decay. Nothing short of a miracle could save it at this point in time. For all practical purposes, Tivo is dead.

Fact: Tivo is dying

Exploding TV?

[PopeAlien]

'The fate of TiVo also highlights the dilemma facing a lot of "exploding TV" start-ups.',

ok, I admit I'm not real familiar with the latest in television technology, but exploding TV's? what could possibly be the upside of that? faced with that sort of danger you'd definately want a TV-b-Gone. I'd say if their TV's are exploding TiVo's fate has definately been sealed.

I don't doubt it

[lukewarmfusion]

First, I have to take issue with the claim that such technology, concepts, and products are not enough for a successful business. I think their success to this point is evidence enough of the power of this kind of product.

On the other hand, I have to agree that Comcast has the power to propel TiVo into a different level of play. With that kind of support, they'd have a huge step up on all this exploding competition. That competition is finding ways to improve upon what TiVo already has - free listings, better storage, better interface, etc. Why compete directly when you could stand on the shoulders of Comcast?

So how much is a MythTV?

[Russ Nelson]

Okay, so if I can pick up a TiVo for a couple of hundred bucks, how much is a MythTV box? You need a fast pentium box with a large HD, right? Plus a video encoder. What's the cheapest MythTV box that I could put together that competes with a base TiVo?
-russ

Re:So how much is a MythTV?

[sydsavage]

Yep, a home built MythTV box is going to cost more than TiVo, and it's not exactly a plug and play experience. Here's an approximate breakdown of what I spent building mine:

• $30 case
• $70 motherboard (Shuttle MN31N)
• $80 cpu (AMD Athlon XP 2500+)
• $90 512 meg ram
• $50 40 gig harddrive
• $120 250 gig harddrive
• $180 Hauppauge PVR-350
• $80 DVD burner (not necessary, but nice to have)
• Many, many hours getting the right combination of drivers, etc compiled

Now, before anybody jumps all over me and says I could have saved $x here or there, I should point out that I originally built the computer to be a linux workstation, and then decided to try my hand at building a DVR. Originally, I spent $335, including shipping, to put together a decent box to run SuSE 9.1. I went for the Shuttle mobo so I wouldn't have to buy a seperate graphics card or sound card. This board has a twin VGA nVidia GeForce4 MX with shared memory, Realtek ALC650 audio, and onboard 1394 and USB 2.0. It is capable of digital audio out with the addition of a $30 header board. I went with the AMD processor because I wanted good performance, without spending too much. The board supports anything from a Duron 700 up to an Athlon XP3000+ (or possibly higher, I think that's all that was out when the documentation was printed).

So, if you wanted to trim the price down further, you could find a motherboard with integrated graphics that has S-Video out, and then get the cheaper Hauppauge PVR-250 or another capture card. This will give up some quality, as the PVR-350's video out is allegedly much better than other graphics cards, but it's a trade-off for price. You could get by with a lot slower processor than mine. You can get buy with a lot less memory than I have. You could probably find a case for free or close to it.

Another possible route would be to start with a Shuttle bare bones system, and add a Hauppauge or other capture card into the one PCI slot. I hope to add more capture cards to my system, so I ended up ruling out this solution.

As far as the time I put into it, I consider that to be an education. Without a reason, I wouldn't normally get my hands so deep into the o/s internals. I learned a lot about kernel modules and how they work on this project.

If you decide to do this, I highly recommend it. But don't go into it thinking it's a way to get cheap TiVo. It's a way to have fun building a cool project that you will (hopefully) enjoy long after the building is done. I still take a lot of pride in my system, and really enjoy showing it off to guests. And it does a whole lot more than TiVo, I should add.

What TiVo needs to do.

[stratjakt]

Ditch the service.

Open the box, screw this DRM'ed TivoToGo crap. Just open an SMB service, or ftp, or some such.

Sell the box at a profit. I'd pay up to 500 bucks for one, that just worked - always, regardless of whether TiVo is still in business. It's still cheaper than rolling my own with MythTV, and a whole lot less of a hassle.

Since that's not what they're going to do, since TivoToGo turned out to be useless - need a custom app to burn to DVD? And it's not out yet? And I'm supposed to buy what is basically the same Prassi/Stomp/Veritas software that I already have three copies of again for another 50 bucks?

Anyways. I like the TiVo interface. Good riddance to the rest of it.

I've been playing with MythTV. As soon as I get it working to my liking, my series 2 TiVo goes up on eBay. I'm getting there, it's nothing but time and effort.

I already know it'll blow TiVo away, it'll stream recorded content and live TV via VideoLan, which I can watch on satellite boxes, which I plan to be no more than some hacked XBoxes. It'll have (at least) two tuners. It'll record to DVD-R without jumping through hoops. It'll grab content from the 'net.

So on an offtopic note, anyone have an idea how support for the Hauppage PVR150MCE and 500MCE is going under ivtv? I got an itch to order the 500MCE (mmm two tuners, two encoders.. all for roughly the price of the 250), becuase it looks like it will be supported soon.. But I don't want to be stuck with a dud.

Re:oh man

[GeorgeMcBay]

The product was good, service was good but the rest of the business world (mainly M$) did

As rich and powerful as Microsoft is, they just don't have the kind of power you think they do, especially when it comes to markets outside of computer OSes. I can't believe you're sitting here blaming Microsoft for the fact that Tivo is a poorly run company...

The vast majority of business failures people think were somehow caused by Microsoft were really caused by the ineptitude of the company that went under. When Microsoft goes after a market, a well-run company will push them back (see: Quicken vs Microsoft Money). A poorly run company? Well... Darwin's law kicks in. Is that really Microsoft's fault?

This is what I feared

[earthforce_1]

and why I would never buy any piece of hardware that relies on a subscription. All the more if they offer a "lifetime" subscription where you pay up front. People have fallen into this trap with health clubs as well - what is the chance that the company behind the hardware will outlive me?

Re:This is what I feared

[rcastro0]

and why I would never buy any piece of hardware that relies on a subscription

You mean you don't have a cell-phone ?

TiVo has two things going for it

[mveloso]

TiVo really has only two things going for it:

* the program guide
* the interface

The program guide is really great, and the interface is incredibly easy to use.

The problem seems to be TiVo spends a lot of its money on the boxes. Hardware costs for the TiVo boxes totalled $68,056,000 for the last nine months of the last fiscal year. That's a lot of hardware.

They're also selling that hardware at a loss. HW Revenues were $60,823,000, with $29,508,000 in rebates. Ouch.

There's not a lot that TiVo can do, financially.

The TiVo service only cost $25,069,000 to run for those 9 months, while TiVo pulled in $81,311,000 in revenue. That means if they stopped selling TiVo boxes, they'd make money (though it's unclear from the revenue numbers if the tech revenues include partner hardware).

That won't expand their customer base, though.

Maybe they could spin off their guide business and license it to other box manufacturers? I'm sure TV Guide would love to buy it from them. It would free the guide to provide services to all the manufacturers, though they obviously have someone doing it already (who knows?).

Maybe they could contract to get the hardware built more cheaply?

The hardware is really killing them. Sure, they can't do a Microsoft (not at less than $1/subscriber/month for licensees). But they don't have to have high-end hardware either.

Success?

[fm6]

First, I have to take issue with the claim that such technology, concepts, and products are not enough for a successful business. I think their success to this point is evidence enough of the power of this kind of product.

"Their success to this point"???!!! For a private company, success means profits. If not actual profits, then hopes of profits in the forseeable future. As the story mentions, they've lost half a billion dollars, and show no sign of going into the black.

TiVo lovers (I used to be one myself) think this product is terminally cool because, when a TiVo box works correctly, it makes TV watching 100 times more enjoyable. But that, by itself, is not "success". Tivo lovers, though fanatical, are few and far between. TiVo has simply made too many mistakes. The platform is too klugy, so there's always been reliability issues. And if it does break, you have to send it back to the factory, for fees that approach the original purchase price. Even if nothing ever went wrong, most consumers just don't see such an expensive gadget as being worthwhile for what it does. This company is circling the drain.

Sorry to burst your bubble, but good "technology, concepts, and products" is not a guarantee of success. There are other factors: marketing, management, timing, access to markets, and just plain luck. The few techies that get rich making some amazing breakthrough get all the press -- but most innovative tech companies fail.

Which is true of all business. You can get very, very rich, but not without taking very, very big risks.

Re:Success?

[dant]

The platform is too klugy, so there's always been reliability issues.

Erm, really? I've been a TiVo customer since almost the start--I've got two TiVo boxes of my own, and used a very-hacked third for years. I've seen problems with them, sure, but nothing I would blame on TiVo itself.

What sort of reliability issues are you talking about? Whatever they are, they're all news to me.

Now, TiVo's business prospects are a completely different matter, and I do fear they will die before the non-techie public realizes what they can do.

DirecTiVo / CES

[deviator]

I was at CES. DirecTV is dropping TiVo for their own new custom-built upcoming DVRs. From what I understand DirecTV currently provides some life support for TiVo in the form of a rather inexpensive licensing/subscription fee for each user--but that will go away.

The interface is incredible; the remote is the best I've ever used for anything; the programming guide is extremely good... but anyone and their Mom can hack together a DVR at this point (not that it'll be as good as TiVo).

Re:Very True

[lightspawn]

Instead of messing with all that, I stopped by the Cox office and they gave us a new cable box for free and the extra DVR functionality for an extra ten dollars a month over what he had already been paying. He's not going to notice a big difference between that and Tivo, so it's definitely "good enough".


But only because he's never used a TiVo.

I own a TiVo, and hate hate hate using Cox's DVR, which has horrible usability issues, even apart from the response times (over a second for basic operations).

As a random example - if you view a list and press page-down, you're now at the TOP of the next page. Pressing page-down again brings you to the bottom of the page and another press to the top of the next page.

TiVo practically always does exactly what I expect when I press a button, and the layout is so convenient that I never have to look at the remote.

I would gladly buy TiVo's UI people a round of drinks, but could get violent if I ever met Cox's DVR's developers (it looks like they have no UI people and let the programmers do it).

Most people miss the point of TiVo

[WalletBoy]

I think most people miss the point of TiVo especially when they say things like "I can just build a MythTV box or I can do this on a computer..."

What makesTiVo really great isn't the box, or the interface, or any of the generic PVR features, it's the TiVo service that makes it great and you lose that with everything else. It's the service that's worth it for me and what I don't mind paying for it. All these other PVRs are just hard-drive based VCRs with a GUI. Even a TiVo box is just a hard-drive VCR with a GUI without the TiVo service.

Sure you can get other PVR solutions to download TV-listings and they probably have something like TiVo's season pass where it can follow shows you have season passes to and tape them whenever they air (even if they are pre-empted). The one thing I don't know if anyone else has is the TiVo suggestions. I have my TiVo so well trained I don't have to use the TV listings anymore. My TiVo picks out most of what I watch for me. It's like hiring a personal secretary who knows your tastes.

After I come home for work and eat dinner, I usually have enough shows on my TiVo that TiVo picked for me to keep me entertained until I go to bed a couple of hours later. I don't have to surf channels, I don't even have to look at any listing to see if it's something I might like to watch and tell my PVR to tape it. It's gotten to the point where sometimes I don't even know what's on TV anymore and I don't care because I have more than enough shows I like to watch waiting for me each evening. I don't have to spend 20 minutes each day scrolling through a program listing of 500 channels to find the one program I might like to watch tomorrow and tell my PVR to tape it. For me I don't mind paying $12.95 a month if it means saving me 20 minutes a day in front of a computer or on a TV menu doing "prep-work" for my evening's TV watching. I will sorely miss this if TiVo were to go away.

Re:Ce La Vie (in bad accent)

[sydsavage]

You are mistaken. My MythTV box, built around the Hauppauge PVR-350, has better quality encoding than TiVo. MPEG-2 recording at full SDTV resolution of 720x480, while an unhacked TiVo is limited to around half that.

Wins and Losses.

[bort27]

I've had my TiVo for over 4 years now. I love it to death. I think that TiVo did a hell of a lot of things right. Some quick examples:

1. Unlike, say, Microsoft, they never discouraged their users from hacking their boxes. As a result, a huge community of TiVo hackers emerged (see http://www.tivocommunity.com/). I upgraded my TiVo's 30 gig hard drive to two 120's, and installed a cachecard/network card combo from 9th Tee, which means I can do fun tricks like scheduling shows and season passes from the road, or watching shows in my bedroom on my XBOX.

2. Really great support. I've only had to call TiVo a couple of times, both for channel lineup issues, but they were always extremely friendly and helpful over the phone. For example, after I moved into my new house, I realized that Adelphia had just upgraded the cable in my area, and TiVo didn't have the lineup yet. So I called support, and the next day, TiVo called me back to tell me that my lineup was added. Simply awesome.

3. Choosing Linux. When I telnet into my TiVo, I get a bash shell. I've installed an ftp server, web server (TiVoWeb), and even installed cron. How cool is that? Plus, this excellent decision has led to new software being developed exclusively for the TiVo (such as a caller id display that uses the TiVo's built-in modem, so you can see who's calling without getting up off the couch). Simply brilliant.

4. The interface. They obviously put a ton of work into it, and it really shows. It just kicks so much ass.

Now obviously, they dropped the ball in a couple of areas. The Comcast merger was just a more recent one. I think these are the two biggies:

1. I think that their biggest problem has always been slow adoption; as long as I've had the thing, I've been seeing ads pop up on TiVo Central giving me hot deals on new TiVo units, which I'm supposed to share with my friends and family. Great, I can save Dad $50 on his new unit. But if they really expect me to convince Dad that he can't live without a season pass on those Seinfeld reruns he loves so much, then they should be giving me the 50 smackers. I'd probably have 10 people signed up under me right now if I got some sort of compensation for it. (By the way, click here to get a free Mini Mac!) :-)

2. Too expensive. The hardware and service together really do cost too much, unless you got in early like I did (back when lifetime service was $200). They should do what my damn cell phone company does: Knock the hardware down to like $99, and make me pay a very affordable $9.95 a month. If I try to cancel before 2 years are up, hit me with some obscene early termination fee. Yes, I hate it when cell phone companies do this, but that's how they stay in business. Besides, it's not like I'd be foolish enough to cancel my TiVo service anyway. TiVo is heroin. So far, I've paid $499 for TiVo and lifetime service, so TiVo won't make any more money off of me. If they were using my above plan, I would have paid in $589 so far, with more coming in every month.

I would really hate to see TiVo go. I hope they don't. But I suspect that even if the service dies, thanks to the openness of their hardware platform, someone (maybe me) will figure out how to write a script to pull show data off of Yahoo! TV or something. And with Microsoft and MythTV and several others entering the PVR market, there's no question that TiVo's invention is here to stay.

bort.

Re:So it goes...

[lucifuge31337]

Ask yourself: how many people in the world still have milk delivered to their front doors?
If the service were availabe in my area at a reasonable price, I would.

How many people still have their gas pumped by an attendant?
Everyone getting gas in the state of New Jersey, and me, whenever I am getting gas while dressed well, when it's cold out, etc., etc.

I just don't get your point....HTPC's blow for non-techies in their current state.

Most overlooked points past shitty UIs and complicated setup: you need a remote control....oh yeah, that's right, every one availabe for PCs sucks ass. High quality SVIDEO output still isn't there at a reasonable price. And not-so-expensive PCs tend to be noisy. And hot. And not shaped like the rest of my stereo/tv components.

I deal with IT all day. When I come home and want to watch TV, that's what I want to do. Preiod. Not screw with some HTPC, or ssh into my hacked TiVo because the cron job to grab the listings failed.

Re:How?

[HeelToe]

There are TiVo Service Emulators. They put a TiVo program delivery service on your local lan via apache + some modules or custom web applications. I'm guessing this is done via a filtering firewall so you can redirect requests to TiVo from your TiVo box to the local service.

I believe there are two groups out there doing this - one in Canada and one in Australia. I'm told they currently will not open their code to folks in the US because they want TiVo to stay around and make more units.

I assume if TiVo goes defunct, this code might become available.

Re:Half-a-Billion Smackers?

[Dun Malg]

Just out of curiosity I've checked Yahoo! finance and AFAICT TiVo was profitable this year and has almost a 100 million in cash. Can someone explain to me where the "half billion" in net losses is coming from?

They're half a billion in debt, but are currently making a profit. Frankly, the link to the "half billion" figure is to some jackass "Business 2.0" staff writer's personal weblog. This "Om Malik" guy doesn't really impress me. He's a lower-tier writer with questionable opinions. Frankly, anyone who looks only at debt while ignoring profits is a dunce. The /. article lapping it up is the typical misunderstanding of the world of finance. Nobody seems to understand the difference between "defecit" and "debt".