TiVo Ready to Fast Forward?
The Harvard Business School has a great write-up of a speech TiVo CEO Michael Ramsay gave there, titled "TiVo Ready to Fast Forward?"
The big question of where TiVo is headed and how they will remain profitable amid so many competitors is the main focus, with Ramsay talking of TiVo as a digital lifestyle hub that is already miles ahead of competitors. An interesting point is made by Ramsay when the subject of TV advertising comes up. He projects a different business model in the years ahead:
Most of the company's revenue today is derived from subscriber payments ($12.95 per month), followed by hardware sales and advertising. In ten years, Ramsay believes, the model will be one-third subscribers, one-third advertising and advertising research, and one-third "premium services" to customers.
They also have plans to move into international markets, which sounds great, if they can price it correctly and work with other TV systems. I know plenty of Canadians, Australians, and Japanese that are dying for an officially supported TiVo in their own country.
The question that nobody is answering at this point though is, with a friggin' market cap of $423 million, why in the blazes is somebody NOT buying the entire company? Apple? Amazon? Microsoft (ok anti-trust and it's not nice to buy a competitor just to put them out of business), Netflix? DirecTV? Comcast? Motorola? Anyone? How cheap does TiVo need to get before someone will buy them? Or is everyone just waiting for the shoe to drop and try to buy up the brand and the assets on the cheap in bankruptcy court?
Posted by: Thomas Hawk | November 16, 2004 at 09:04 AM
If Ramsay really thinks that TiVo is "miles" ahead of competitors, he has some more thinking to do. It's true that HMO is far more widely deployed than, say, MCE 2005, but TiVo is heading for a big squeeze between "good enough" devices like the Moto DCT64xx and high-end solutions like MCE or MythTV (and I call those "high end" not just because of cost, but because of the product of cost and effort required to use them compared to TiVos).
Posted by: Paul Robichaux | November 16, 2004 at 01:42 PM
Check out www.payfornothing.com for more information about this.
Posted by: janiqua | November 17, 2004 at 08:36 AM
Well hey, this is great. Really. Because if they're relying on advertisers, our monthly fee will go down. Or the price of the lifetime subscription will go down! Right? Right? Uh, hello? What's that chuckling sound I hear?
Posted by: Mark Smith | November 17, 2004 at 06:31 PM