Rebates seem to be a way of life for gadget loving shoppers, although I've never heard from someone who enjoys waiting for their savings to come in the mail. Over on the TiVo Community forums, TiVo Customer Support Program Manager Bill Dailey explains why TiVo uses rebates:
As to the idea of just lowering the price rather than offering a rebate, rebates are used for a couple of reasons (by just about every consumer electronics company out there):
1. Not everybody claims them. The fact that only a certain number of people will complete the rebate paperwork is figured into the cost of a rebate. Lowering the price would have a much larger financial impact than a rebate, likely making it impractical.
2. Just having a rebate drives people to buy products. Lowering the price $100 does not have the same effect as having a $100 rebate. People buy more products when there is a rebate - regardless of if the final price would be the same either way.
Above Dailey's post, another forum member points out that because not everyone redeems their rebates "if TiVo was going to drop the rebate, the price would drop by less than $100." Which would you rather have: a $99 TiVo with a $100 rebate or, for argument's sake, a $150 TiVo?
Thomas Hawk recently posted his interview with Windows Media Center bloggers, which is an interesting insight for people like me who don't really keep up with Microsoft's offerings. One thing I liked was that the developers have pinpointed the most important litmus test for PVRs:
Speaking of wives, there’s something what we call internally here at Microsoft the "SAF"- Spousal Acceptance Factor. It’s a very important informal metric we use internally just like the "eating our own dogfood" metric where we take builds home to test in addition to formal betas and usability testing.
It's a simple little RSS reader that pulls down info on who will be the guests on all the late night shows, but shows how slick even something as simple as this can look on a TiVo.
I can see folks adding dozens of little apps like this to their TiVos soon if it's easy enough to find, add, and use them without getting too bogged down when you have a bunch. I can't wait to see what other niche apps get built for the HME.
Still no news on the rumors that Apple is buying TiVo, since Apple isn't suing anyone this time there's no way to be sure one way or the other. However, people putting their TiVo stickers on the backs of their iBooks might want to hold off a little while. It's unlikely that either company will come out and deny the rumors even if they're untrue, so we'll just have to wait and see if they get confirmed.
While we're waiting, let's look at what the companies could offer each other. First off, TiVo is built on top of Linux, Mac OS X is built on top of a
NetBSD port called Darwin. I'm no kernel hacker, but it seems like it would be possible to port TiVo's Linux changes to Darwin. It would be easier for Apple and TiVo than most companies because they both are built on PowerPC architectures - at least easier than if there were rumors of Microsoft buying TiVo.
Meanwhile, Apple's iTunes Music Store continues to sell iPods (well, they don't sell them on the iTMS, but you know what I mean). There is speculation that Apple will be building a QuickTime Movie Store; if Apple could make money selling the hardware they could use the iTunes Music Store business for it as well. It would also help cement the position of the Quicktime Streaming Server, which would likely sell a number of Xserves.
A TiVo acquisition would also provide a place for iTunes in the living room. Apple's AirPort Express proves Apples interest in moving out of the office and into the living rooom. There's even a way to control an AirPort Express from the TiVo using HME.
The TiVo could also tie into Apple's iLife suite. TiVo already plays well with iPhoto and iTunes, why not add iMovie and iDVD integration as well? My sister could make an iMovie of my nephew and send it to my TiVo between my 10 hours of Law & Order a day, then I could burn it using iDVD. Heck, why not let me show my Keynote slideshow using my TiVo?
Then there's the perennial talk of a video iPod. This fits in perfectly with TiVoToGo, you would simply dock your iPod on your TiVo and download your shows. Obviously there are some technical challenges there for the TiVo and iPod, but TiVo provides a great platform to build on.
So what does TiVo gain from this? For one thing, Apple is sitting pretty well these days. It could afford TiVo some elbow room to innovate; right now Ramsay is frustrated with investors not seeing the bigger picture. As an Apple division they could focus more on user experience and product development.
Apple's name would also give Om Malik the premium branding he says will save TiVo. Apple has a firm grasp on how to survive with a premium product and a small marketshare. TiVo's competition with the cable providers looks a lot like Apple's competition with Microsoft. Apples experience in this fight could prove invaluable.
Apple's offerings also tie into TiVo's Tahiti plans. TiVo knows that in order to compete with the cable companies, it needs to offer something they can't. Access to content through Apple would be a great start to that.
We may never hear anything else about this rumor but there's certainly plenty of reasons why an Apple/TiVo merger could work.
Reuters is reporting that TiVo stock is up up up based on rumors that Apple might acquire the company.
"What we hear on the street is that Apple is interested in their business and that they are a takeout target," said analyst Steven Kroll Jr. of Monness, Crespi, Hardt & Co.
Representatives for Apple and TiVo both declined comment.
While Reuters likes to talk to "analysts" and "representatives," we all know it was our post about playing AAC files on a TiVo that really sent Wall Street into a tizzy.
So what would an iTiVo look like? White plastic all around? Complaints about there only being one TiVo button on the remote? Leave your thoughts in the comments.
[Update: Smith Barney says a merger is "highly unlikely." They say "it appears as though Apple want to stay focused on selling select proven products (e.g. iPod) rather than gambling on unknown initiatives" and "Apple indicated that the DVR market seems to be a commodity whereby all players will eventually have similar hardware and software longer term." So now we have rumors that nothing will happen to contradict rumors that something will happen. All you Windows people are getting a taste of what it's like over on the Mac side of the fence.]
Being a zealot for both TiVo and Apple can be tough at times. We can't watch TiVoToGo files yet, even though the CEO is a switcher. We have to listen to people constantly telling us about how the companies are about to die. At least now people who encode their music in Apple's AAC format have a way to play their music on their TiVos through TiVo Desktop 1.9.
According to Dennis Wilkinson on the TiVo Community forums, 1.9 includes a program called "SoundConvert" that will run AACs through LAME, if LAME is installed in /usr/local/bin/. All you need to do is install LAME and restart the TiVo Desktop. macosxhints has a guide to installing LAME, or you can get it from Vas the Man.
Unfortunately, you can't play songs you bought from the iTunes Music Store because they have DRM. If you thought you should actually be able to listen to music you bought on your TiVo, you'd need to strip out the DRM with something like jHymn.
Opera, the company that makes the browser you're too cheap to use, is stepping up their PVR options. They have a software platform for set top boxes that provides media playing, web browsing and interactive TV. While we'll leave it for historians to decide if "iTV" was an idea before its time in the mid-90's or just a bad idea, Opera's voice controlled program guide sounds like a great idea. Truly, we are living in the future.
While everyone's working on software to turn the mac mini into a home theater PC, NoDRM has some shots of a mini mounted directly onto the back of a 42" plasma screen. It's so small on the back that I wouldn't be surprised if someday Apple sold HDTV monitors with mounts like this.
Developer Andrew R. Wallace has created a way to browse the photo-sharing site Flickr from TiVo using the new Home Media Engine feature, and it looks great. I just tried it out and my Flickr account is completely available from my TiVo. I think this has a good chance of winning Best Photo Application in the TiVo Developer Challenge.
HME apps require System 7.1, which includes TiVoToGo. If you have System 7.1, you'll need to allow HME apps to run by going to System Information and pressing clear clear 0 0 on your remote. Then, just download the Java program and run it on your computer. You can find out more at the developer's site or rate it at HME PVRblog.
TiVo should basically give away two million of these devices in next one month - hit the 5 million subscriber mark. That’s $65 million in monthly revenues (assuming everyone pays $13 subscription fees.) At those numbers the company can do $750 million in annual sales.
Next cut back on marketing completely, ala Apple in lean years. Stop pushing the service - and turn TiVo into an exclusive club, a BMW among PVRs.
First, I'd like to point out that there are plenty of Apple and BMW ads on TV. I think that establishing a premium brand requires lots of marketing, turning the product into a lifestyle choice is a lot of what marketing is. Apple's turnaround was launched with the iMac and the commercials with it.
Contrary to establishing a premium brand, the iMac was an attempt to make Apple's accessible to any home user - i.e. the "3 steps" commercial. I could imagine something similar to this for a Series 3 TiVo with cable card support: "Step 1: plug into TV, Step 2: plug in cable card, Step 3: Jeff Goldblum laughing." (Note: I haven't even read the phrase Series 3 anywhere, but if they announce one in the next 2 years I'll point to this post as evidence that I knew first. How else could I know that 3 comes after 2?)
As for giving away 2 million TiVo boxes, if we assume (i.e. perform a rectal-number extraction) that they cost $100 per unit - which is probably a low estimate - then a company with $88 million in the bank is spending $200 million to give away their product. This seems bad, but if they're given away with the cell phone free-with-contract model, then TiVo could make back the cost of those units within 8 months (again, assuming a cost of $200 million).
TiVo has done give-aways before, but never to that extent. In 2000 they had an essay contest where they gave away 14 hour Series 1 units at a rate of 10 a day from mid-September through Halloween. More recently they gave away 2000 Series 2 units to people in the Bay Area that Comcast had led to believe were getting a PVR. Giving away 2,000,000 units would be several orders of magnitude larger than anything like it in the past.
Om picks up on the fact that if TiVo stops trying to nab new subscribers with advertising, investors won't be thrilled.
Of course, no growth in subscribers means Wall Street isn’t going to like it. To that, I say screw them. How about taking the company private. Leveraged buyout! Small, company, which can become profitable. I know there is one gentleman who reads my blog, and is a tech buyout guru who could pull it off. Slow growth and profits versus certain death - well I take the former.
Add on a one time loss for 2 million TiVo units (2/3 the size of their current subscriber base) and people will reminisce about the "good times" when the stock (which has a 52 week high of nearly $13) was at $3.85. A low stock price would certainly make it easier for the company to go private, but it also makes the company a prime target for takeover.