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Does TiVo make Products or Patents?

Posted on March 9, 2010 by Jeremy Toeman

For all intents and purposes, TiVo “invented” the DVR. Actually, they didn’t, but it’s a fair statement that they first successfully commercialized it and brought the concept to the massess.  Further, they did it with competition (ReplayTV), which is often the exact thing that stalls new consumer technology adoption.  The company’s product was loved by those who used it (I had the original 14-hour Philips version), and switching from TiVo to another DVR was a painful process for those of us who had to go through it (for whatever reason).  But switch we did, as the company slowly got pushed out of dominance by failing to keep a healthy relationship with DirecTV (and Philips, Sharp, and others), and all other cable/sat co’s offered their own (mediocre at best) versions of the DVR.  And when a consumer is given the choice of an effectively “free” DVR (an additional $5/mo = free in a purchase decision-making process when already spending $50-$100 on a bill) versus buying one with an upfront fee and a monthly tally, it’s a no brainer.

Over the past few years, the company has slowly settled from being the leader in both installed base and most evolved product into a bit of obscurity with the mainstream (other than potentially owning the brand-category, which doesn’t do much good for running a business).  Their Series 3 and other launches in the late ’00s didn’t bring in a new rush of users, and last week’s launch of the Series 4 (aka TiVo Premiere) is at best a late entry in a crowded market, and at worst a product that massively missed the mark with modern day expectations. On the date of the launch, the company’s stock moved a little bit upwards.  Not too shabby, but also not too interesting.

The next day, however, proved much more interesting, with a 61% increase in value:

What happened? In a nutshell, federal courts found TiVo’s patents held up against a Echostar/DISH claim.

I’m not a lawyer, nor do I generally support the present-day patent system, but that’s not really the point here. What is more relevant is that TiVo appears to have drifted from being a pioneer in the digital home to being a patent player. Instead of betting on the strength of their product team, innovation, and marketing, they are now betting on their lawyers.  And I think that’s a sad state of affairs.

The digital home is a noisy, confusing place, fraught with terrible products. Further, most of the products I’ve seen on the radar or know are shipping soon are also now extremely impressive.  In other words, there’s tons of opportunity today and in the future to build (and monetize) exciting products.

I’d love to see TiVo make a change in direction here.  It’s time for the company to act like a startup again, and show real innovation like they once did.  Truth be told I know the TiVo Premiere is unquestionably a better product than my Comcast DVR (a truly awful product).  But as has been said many times before, and is unbelievably relevant in the convergence space, Good Enough is the biggest enemy of Great products. It’s going to take a heck of a lot more than “slightly better than the last version” for TiVo to regain a leadership position.  The company needs to rebuild it’s team with new innovators who can build on the legacy, and stop investing in “me-too” minor touches, “dongles”, and other things that won’t move the needles. CableCard? Still? Come on.

If companies like Apple, Palm, and so many others can attempt to reinvent themselves, I think TiVo can too.  Please try.

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Posted in Convergence, Video/Music/Media | Tags: comcast, dvr, patent, tivo | 3 Comments |

About

Jeremy Toeman is a seasoned Product leader with over 20 years experience in the convergence of digital media, mobile entertainment, social entertainment, smart TV and consumer technology. Prior ventures and projects include CNET, Viggle/Dijit/Nextguide, Sling Media, VUDU, Clicker, DivX, Rovi, Mediabolic, Boxee, and many other consumer technology companies. This blog represents his personal opinion and outlook on things.

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