VOTIVES FOR TIVO?...
I've been a Tivo user ever since the Series1 came out in the last millennium (We've been Tivoing since '99!) . In that short time, it made it to number 10 on MobilePC magazine's 100 Top Gadgets of all time list.
Meanwhile, the stock has gone from its highs in the 70s at the turn of the millennium to $3.70 today. Both its CEO and President have bolted of late, and head-hunters are prowling for prospective candidates. VCs like Fred Wilson are ducking their calls, while offering suggestions on possible fixes for Tivo's travails.
Tech blogs are afire with their two cents, with folks like Om Malik suggesting giving away several hundred million dollars of hardware for free to make it up in subscription revenue (where have I heard of this before)? Oh, wait, AOL didn't give away PCs to get subscribers, they just bombarded the solar system with billions of discs.
Of course, this is while Microsoft is aggressively pushing Windows Media Center 2005 with its fleet of hardware partners offering devices of every size and shape that record and playback TV, and enable wired and wireless sharing of photos and videos in every home.
And let's not forget every cable and satellite company, including Tivo's erstwhile partner DirecTV is rushing to introduce their own rolled personal video recorders (aka PVRs in techno-fashionable circles).
And let's not definitely forget everyone's flavor of the month, Apple, which could anyday morph the Mac mini or a future iPod into a formidable ultra-cool iTivo, err, iPVR if they (specifically Steve Jobs) so chose.
What would the other Steve do? Not Steve Jobs, but Steve Case? He faced similar odds in 1997, when AOL was about to be eaten alive by similar types of threats. He needed to do what Tivo needs to do now, and that is to GROW FAST AND PARTNER. Steve saw that AOL needed to grow subscribers to a critically large number FAST and build PARTNERSHIPS with a new array of constituents, Marketers and Advertisers to build new revenue streams that supplemented the company's lifeblood subscription revenue.
Three million current Tivo subs are good, but not good enough, especially when half are from a former partner that will soon be a competitor. Case changed the game by drastically changing pricing from usaged based, metered pricing, to a flat pricing model. Demand exploded, the company almost crashed and burned trying to meet that demand, didn't, and ultimately thrived by becoming the number one online service in the country.
This is partially the suggestion that Om Malik is making, give away the boxes to grow the subscription revenue. Of course AOL didn't have to give away PCs, because consumers were accelerating their purchases of home PCs through that period, specifically to use the PC to go online.
Today, PC companies are again trying to find new applications that can drive consumers to buy beefier, faster PCs more capable of handling processor and storage intensive graphics applications. Of course Microsoft is giving them the alternative of offeirng Windows Media Center 2005, but that increasingly requires consumers to buy AN ENTIRELY NEW BOX with an ENTIRELY NEW OS to get the PVR benefits.
What if Tivo could come up with a software package, Tivo for Windows XP? It could be bundled as a standalone package or built into new PCs by the PC vendors on an OEM basis. Of course one would need a hardware device that could wirelessly communicate with the PC in the den and connect to the TV in the living room, with attendant TV tuner circuitry.
But could it be done at a cheaper cost than a standalone Tivo? Could one partner with a Linksys/Cisco to offer subsidised versions of this device, possibly with VOIP telephony?
And don't forget the telcos who are rushing into the super-broadband business (see "Haves and the Have nots" below). Could they possibly offer the possibility of signing up millions of subscribers independent of the cable and satellite companies? Certainly Yahoo! did it by partnering with SBC and other telcos to build millions of paying broadband customers, when only five years ago, it seemed quixotic against the mighty AOL Time Warner and the cable industry juggernaut.
In short, there are a number of intriguing options, but it requires razor-sharp tactical and strategic execution. But then again, so does securing a cab in New York City on New Year's Eve.
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