Posted on 01/16/2005 10:06:07 PM PST by nickcarraway
SAN JOSE, Calif. (AP) -- TiVo has been synonymous with digital video recording since it pioneered the industry five years ago, controlling an estimated one-third of the market in 2004. That lofty perch is now beginning to crumble.
Competition in the growing and lucrative industry is intensifying as cable providers, satellite operators and consumer electronics companies push ahead with models of their own, giving consumers more choices while threatening to significantly blunt TiVo Inc.'s edge.
"They're facing a very, very difficult year this year. It'll be increasingly difficult for them to sign up new subscribers," said Josh Bernoff, an analyst at Forrester Research. "Why do you need a TiVo when there's a cable satellite (digital video recorder) for free?"
Many agree that TiVo's service remains the best of breed, with its easy navigational controls and advanced search and record functions.
Its subscribers, who tend to be an evangelistic bunch, account for one in three of the estimated 6.5 million U.S. households with digital video recorders.
But the small company based in the south San Francisco Bay community of Alviso is now playing in a land of giants, faced with a mass market of consumers looking for convenience and low prices.
Even with its latest innovations, TiVo will find it difficult to compete against the clones of deep-pocketed cable or satellite operators. Those companies can afford to subsidize hardware costs and already have tens of millions of customers on their rosters.
The rivals also charge consumers less per month for digital recording - about $5 to $10, compared to TiVo's $13.
Consider Alex Wilkas, who appreciates the latest gadgetry but won't hesitate to trade it in if another has a better price or better features.
Wilkas lives in the San Francisco Bay area, where the digital recorder battle escalated in December after the local cable company, Comcast Corp., started rolling out its newest DVR-equipped set-top box to customers.
Comcast heavily advertised the advanced digital service. But while some customers were waiting for the boxes to arrive, TiVo gave away 2,000 of its DVRs to anyone who could show a Comcast bill.
That's right, gave them away.
Then EchoStar Communications Corp. took out a full-page advertisement in a local newspaper panning Comcast and reminding potential customers that the satellite company also offered a DVR service.
So which new set-top box arrived in Wilkas' Foster City home two weeks ago? Comcast's DVR, which allows users to record two channels at once.
The main reason, says the 60-year-old real estate agent, was that unlike the others, there was no upfront cost for the equipment - only the monthly service fee of $9.95. Plus, the Comcast box supports high-definition TV signals.
Score one for Comcast, the nation's largest cable provider.
But there are millions more potential customers to go in the nascent market of digital recording, which lets viewers record shows to a hard drive, fast forward through commercials and pause live TV.
A snapshot of how TiVo is being attacked from many fronts emerged earlier this month at the International Consumer Electronics Show, when a slew of rivals introduced their latest products.
News Corp.'s DirecTV, a longtime partner whose satellite customers accounted for about two-thirds of TiVo's subscribers by the end of October, said that it will introduce later this year a new media receiver that employs the DVR software of its sister company, NDS Group PLC. DirecTV is also expected to continue offering TiVo-based recorders at least through early 2007, when its contract with TiVo ends.
Scientific-Atlanta Inc., a provider of cable boxes whose DVR models made up almost 40 percent of its third-quarter shipments, announced the first deployment of its multi-room DVR to some Time Warner Cable customers.
The company said it would debut a DVR later this year with a DVD recorder so users can take their recorded programs on the road (TiVo itself now offers a similar feature but programs must first be transferred to a computer over a home network).
EchoStar's Dish Network unveiled a DVR receiver that also will have 100 hours of space for video-on-demand content, a fast-growing revenue generator for cable companies. The satellite provider also will introduce a line of portable media players that can connect to the DVRs and download recorded content for playback on the go.
Motorola Inc., another cable box provider whose DVR models are now shipping at a frenzied rate to Comcast and others, has plans to deploy more souped-up versions later this year, including one using Digeo Inc.'s widely praised Moxi platform.
And set-top boxes that will compete with TiVo are moving well beyond basic DVR functions: Telecommunications titan SBC Communications Inc. announced a deal with electronics company 2Wire to build a box to handle music, photographs and Internet video downloads.
Hewlett-Packard Co. introduced a media hub using the Linux operating system, a machine that includes a DVR and two high-definition TV tuners, enabling recording of two channels simultaneously.
Consumer electronics companies also are increasingly adding digital recording features into DVD players and TVs themselves.
All those devices, meanwhile, will spar with PC-based Media Centers, which run Microsoft Corp. software and include digital recording features and the ability to shift content from a PC to TV sets in other rooms.
Other new startups are competing tangentially, essentially doing an end-run around traditional programming distribution.
Among them are Akimbo Systems Inc., a video-on-demand provider specializing in Internet-based content, and Orb Networks Inc., which offers a streaming service that lets subscribers remotely access their digital media files from their home PCs. They also can watch live television on gadgets with Internet connections.
TiVo has so far failed to ally with major cable companies but has announced a number of initiatives, including a service to debut later this year that will let users access video content from the Internet.
Next year, it plans to launch a high-definition digital recorder featuring an emerging CableCARD technology that allows devices to access cable TV programming without the need for cable companies' equipment.
Analysts say it's unclear whether the strategies will pay off.
NOOOOOOOOOOOOOOOOOOOOOOOOOO! I just learned how to use the TIVO!
I'm thinking putting a Mac Mini in my Home Entertainment cabinet, hooking it up to my TV and recording shows alongside the VCR. And best of all, no monthly subscription fee, ever.
Take a look at my thoughts in post #4. Thanks
This statement will surley raise some ire...
"Long live Microsoft Ultimate TV!"
I bought my Microsoft/RCA Ultimate TV DVR 2.5 years ago. It has been great! I can record 2 shows at once from my Direct TV receiver and I upgraded the harddrive to 120 gig so that I have 90+ hours recording capacity. I no longer watch commercials!
Tivo's are the best still.
You can hack the system to get it to transfer files to the PC, you can increase the HD, and change annoying limitations.
Hahahaha! You can hack the system, my son can hack the system, but me? No....Just learned how to post pictures on this site today. Does that tell you how limited my knowledge is. Thanks for the info though. :)
Build your own. www.mythtv.org
MythTV is a linux based Convergance Set Top Box with DVR, DVD, Music, Image, Weather, Web, News, Phone and other plugins.
My MythTV setup can record 4 shows simulatneously (2 from cable, 2 from OTA HD broadcast). It uses a central server location which allows playback on any connected frontend.
Tivo is so easy I can use it
I just added a 2nd HD to my DirecTivo. Very cool! It's also got 2 tuners in it (for recording 2 shows at the same time or recording 1 and watching a different one).
It's only $5/month above DirecTV costs. The cost is worth the benefits. I could rig something up with one of my Macs or PCs or something Linux (I'm a software developer). But I don't have time to spend meddling around and not getting it "quite right."
Yeah, I'm a Tivo (actually DirecTivo) evangelist, almost as much as I am a Mac evangelist.
This is why I'll never buy a TiVo: Too many people are handed them for free. A couple of years ago, TiVo was moving from 1st-generation to 2nd-generation DVRs, and held a contest to get rid of the leftover 1Gs (this was back when you couldn't get any TiVo for less than about $300). Basically, you had to write a poem explaining why you should be given one of the free TiVos. But they screwed up, and started giving away free machines to everyone who entered, and word spread fast. They quickly ran out of 1G machines, and started handing out brand-new 2G machines to their "winners." Then they decided to start enforcing the rules, in which the poems were actually supposed to be judged on originality. People all over the web started posting their poems on various forums, and bragging about how their hideous crap was winning ("Roses are red / violets are blue / give me a TiVo / or I'll sue!"), while those of us that put a little bit of creativity into our entries had ours turned down. On top of that, the rules specifically said "professional writers are not eligible to enter," yet a huge percentage of the winners were professional writers.
That was the moment I decided TiVo could go to hell. If they want to give me a free machine, I'll sign up, but until then I'll happily stick with downloading the shows I've missed off the net.
ping
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