Forbes Magazine reported that some analysts have concluded that TiVo needs to find a partner in the cable industry in order to avoid becoming a marginal player in the television technology market. The article says that Forrester Research analyst Josh Bernoff believes that TiVo risks evolving into a company like Apple Computer: a niche player with strong customer loyalty and high profitability on a per-unit installed unit basis.
In PVRblog’s coverage of this story, readers have pointed out some potential flaws in this analysis. One major component of the conversion to digital television is the elimination of the need for a free-standing set top box. As consumers begin to adopt HDTV, they will have the opportunity to replace their set top box with a digital television receiver. This device could easily contain embedded video recording technology powered by TiVo. So, cable company-provided set top boxes with video recording functionality might turn out to be transitional, not permanent additions to the home.
Another issue is that many cable companies may prefer to sell video-on-demand services to their customers, rather than leasing them personal video recorders (PVRs). Video-on-demand would better satisfy many producers of TV content, and would probably maximize marginal revenue. Video-on-demand is unlikely to ever truly replace a PVR in a home theater because the PVR could function as a media server that stores and plays home videos, digital photos, and music.
The features that exist in “Series 2” TiVo units, particularly the Home Media Option are valuable, available today, and unlikely to be duplicated any time soon. If you are on the fence about whether to buy a TiVo-powered PVR, opt for your cable company’s non-branded solution, or survive with the video-on-demand services on your cable system, I would say that you will be most satisfied by buying and owning a TiVo -powered device.
The only reasons I can think of that would make this untrue is if you have a philosophical problem with paying for the TiVo service or recording HDTV signals on your PVR is something you will want to do before the end of the first quarter of 2004. If you either of these issues concern you, then you may be best served by making one of the other choices.