nukevor
06-12-2004, 03:15 PM
See Tivo
TIVO COULD BE LEFT BEHIND BY DEEP-POCKETED RIVALS
By Sam Diaz, Mercury News
http://www.mercurynews.com/mld/mercurynews/business/8906766.htm?template=contentModules/printstory.jsp
When Oprah Winfrey, known for having a Midas touch, sang the praises of TiVo last year, the company's stock shot up more than 10 percent over a few days.
When DirecTV said earlier this week that it had sold its stake in the San Jose company, the stock plunged more than 14 percent within hours.
There's no doubt that TiVo pioneered a technology that inspired a loyal following. It revolutionized television viewing by giving users of its set-top box the ability to pause live television, record programs to a hard drive and watch them later -- zipping past commercials as they watch.
But TiVo, the company, is a different story.
Since its founding in 1997, the company that pioneered the digital-video-recording market has never made money. Today, questions are mounting about whether it will be left behind as a niche player in a market that's quickly filling up with giant, deep-pocketed competitors.
"TiVo has a great brand name, but the bigger question is how can they monetize that brand name?'' said Alan Bezoza, an analyst with Friedman Billings and Ramsey in New York.
The cable- and satellite-TV companies -- which can sell DVR upgrades to an established base of customers -- are rolling out their own DVR services, some of them licensing the technology of TiVo's rival, Digeo.
TiVo has its own big partner in DirecTV, the satellite-TV service controlled by Rupert Murdoch's News Corp. That partnership has helped TiVo increase its subscriber rolls to 1.6 million today, which may lead the industry. (About 900,000 of TiVo's subscribers come through DirecTV and 700,000 through TiVo's own stand-alone, branded service.)
But confidence in TiVo's ability to hold onto its biggest partner -- DirecTV -- is wavering. DirecTV sold its 3.4 million TiVo shares, and DirecTV Vice Chairman Eddy Hartenstein resigned from TiVo's board earlier this month.
Although both companies said the partnership agreement -- which runs through 2007 -- will not change, the sharp slump in TiVo's stock points up how vulnerable the company's fortunes are to the moves of the big players.
What's more, TiVo so far hasn't signed up a major cable partner -- key because cable reaches so many American households.
Brodie Keast, senior vice president at TiVo, said the company is moving forward on several fronts to achieve profitability by the end of the year. He points out that TiVo subscriptions continue to grow and the company continues to pursue another major partner, specifically a cable-TV provider.
"We'd love to have a cable deal, but we're not going to bet our life on that,'' Keast said.
Meanwhile, competitors keep increasing their presence.
Dish Network, the satellite-TV provider owned by EchoStar -- which is closest to TiVo in number of subscribers -- continues to grow by offering a free DVR service to premium customers. News Corp., which has a controlling interest in DirecTV, also owns NDS, a European software company that competes with TiVo on DVR technology.
And cable companies, which never really saw TiVo as a must-have, recently have stepped up their own efforts in DVR.
That's where Digeo, a Palo Alto company that recently landed deals with three of the country's largest cable-TV providers, comes into the picture. Charter Communications is rolling out Digeo service in several markets and Comcast and Adelphia are testing it around the country.
Digeo sells Moxi, an all-in-one set-top box designed to deliver programming, connect to the home computer and serve as a DVR.
Digeo CEO Jim Billmaier said the company decided early on to concentrate on cable-TV systems and not market itself as a stand-alone brand-name product the way TiVo does.
Billmaier said that marketing its own stand-alone service as well as selling to the cable companies ``creates conflicting goals.'' He added: ``We don't want Digeo and Moxi to be the upfront brand. We want to be like the `Intel inside.' We think the bigger brand name is Comcast.''
But TiVo is trying to move forward on its own, upgrading its stand-alone service by stepping up its premium offerings to compete with some of the other players.
Analysts say there will always be customers who want to pay for the extras that come with TiVo. David and Tamra Chavez of San Jose, for instance, were happy with their DVR service from Dish Network -- until they saw the DirecTV-TiVo box of David Chavez's parents and decided to switch.
"It has a lot of bells and whistles that Dish Network didn't. And I'm totally willing to pay for them,'' said David Chavez.
As TiVo follows a two-pronged strategy through partnerships as well as its stand-alone service, it remains an open question whether the DVR pioneer will be run over by the powerhouses.
Steve Shannon, a former executive at TiVo rival ReplayTV, said he has stayed clear of the big cable and satellite companies as he prepares to launch Akimbo, a San Mateo company that plans to offer foreign-language content over the Internet.
"It's a tricky business model when you're dependent on people like the cable operators and satellite operators,'' he said.
"I think Replay and TiVo both pioneered the whole prospect of a hard disk being next to the TV. But as it happens so often with the pioneers, the big gorillas follow on and then the challenge becomes whether the pioneers can hold on to some of their position.''
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TIVO COULD BE LEFT BEHIND BY DEEP-POCKETED RIVALS
By Sam Diaz, Mercury News
http://www.mercurynews.com/mld/mercurynews/business/8906766.htm?template=contentModules/printstory.jsp
When Oprah Winfrey, known for having a Midas touch, sang the praises of TiVo last year, the company's stock shot up more than 10 percent over a few days.
When DirecTV said earlier this week that it had sold its stake in the San Jose company, the stock plunged more than 14 percent within hours.
There's no doubt that TiVo pioneered a technology that inspired a loyal following. It revolutionized television viewing by giving users of its set-top box the ability to pause live television, record programs to a hard drive and watch them later -- zipping past commercials as they watch.
But TiVo, the company, is a different story.
Since its founding in 1997, the company that pioneered the digital-video-recording market has never made money. Today, questions are mounting about whether it will be left behind as a niche player in a market that's quickly filling up with giant, deep-pocketed competitors.
"TiVo has a great brand name, but the bigger question is how can they monetize that brand name?'' said Alan Bezoza, an analyst with Friedman Billings and Ramsey in New York.
The cable- and satellite-TV companies -- which can sell DVR upgrades to an established base of customers -- are rolling out their own DVR services, some of them licensing the technology of TiVo's rival, Digeo.
TiVo has its own big partner in DirecTV, the satellite-TV service controlled by Rupert Murdoch's News Corp. That partnership has helped TiVo increase its subscriber rolls to 1.6 million today, which may lead the industry. (About 900,000 of TiVo's subscribers come through DirecTV and 700,000 through TiVo's own stand-alone, branded service.)
But confidence in TiVo's ability to hold onto its biggest partner -- DirecTV -- is wavering. DirecTV sold its 3.4 million TiVo shares, and DirecTV Vice Chairman Eddy Hartenstein resigned from TiVo's board earlier this month.
Although both companies said the partnership agreement -- which runs through 2007 -- will not change, the sharp slump in TiVo's stock points up how vulnerable the company's fortunes are to the moves of the big players.
What's more, TiVo so far hasn't signed up a major cable partner -- key because cable reaches so many American households.
Brodie Keast, senior vice president at TiVo, said the company is moving forward on several fronts to achieve profitability by the end of the year. He points out that TiVo subscriptions continue to grow and the company continues to pursue another major partner, specifically a cable-TV provider.
"We'd love to have a cable deal, but we're not going to bet our life on that,'' Keast said.
Meanwhile, competitors keep increasing their presence.
Dish Network, the satellite-TV provider owned by EchoStar -- which is closest to TiVo in number of subscribers -- continues to grow by offering a free DVR service to premium customers. News Corp., which has a controlling interest in DirecTV, also owns NDS, a European software company that competes with TiVo on DVR technology.
And cable companies, which never really saw TiVo as a must-have, recently have stepped up their own efforts in DVR.
That's where Digeo, a Palo Alto company that recently landed deals with three of the country's largest cable-TV providers, comes into the picture. Charter Communications is rolling out Digeo service in several markets and Comcast and Adelphia are testing it around the country.
Digeo sells Moxi, an all-in-one set-top box designed to deliver programming, connect to the home computer and serve as a DVR.
Digeo CEO Jim Billmaier said the company decided early on to concentrate on cable-TV systems and not market itself as a stand-alone brand-name product the way TiVo does.
Billmaier said that marketing its own stand-alone service as well as selling to the cable companies ``creates conflicting goals.'' He added: ``We don't want Digeo and Moxi to be the upfront brand. We want to be like the `Intel inside.' We think the bigger brand name is Comcast.''
But TiVo is trying to move forward on its own, upgrading its stand-alone service by stepping up its premium offerings to compete with some of the other players.
Analysts say there will always be customers who want to pay for the extras that come with TiVo. David and Tamra Chavez of San Jose, for instance, were happy with their DVR service from Dish Network -- until they saw the DirecTV-TiVo box of David Chavez's parents and decided to switch.
"It has a lot of bells and whistles that Dish Network didn't. And I'm totally willing to pay for them,'' said David Chavez.
As TiVo follows a two-pronged strategy through partnerships as well as its stand-alone service, it remains an open question whether the DVR pioneer will be run over by the powerhouses.
Steve Shannon, a former executive at TiVo rival ReplayTV, said he has stayed clear of the big cable and satellite companies as he prepares to launch Akimbo, a San Mateo company that plans to offer foreign-language content over the Internet.
"It's a tricky business model when you're dependent on people like the cable operators and satellite operators,'' he said.
"I think Replay and TiVo both pioneered the whole prospect of a hard disk being next to the TV. But as it happens so often with the pioneers, the big gorillas follow on and then the challenge becomes whether the pioneers can hold on to some of their position.''
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