Will TiVo Become Software Inside Your TV?

Might Tivo (TIVO) one day be embedded as a piece of software in your television set? The company is rapidly moving in that direction.

The DVR pioneer's recent linkup with Comcast Cable (CMCSA) is putting  software in New Englanders' cable boxes that would enable Tivo's fast-forwarding and view-later capabilities to work without having to add a separate Tivo box. If that experiment works, a national rollout could follow.

Tivo meantime has struck a deal with Mitsubishi (MSBHY) to bundle its own DVR boxes with Mitsubishi TVs. And Comcast has announced a plan with Sony (SNE) to try doing away with physical set-top boxes and include virtual, software-based cable boxes inside the TV itself. There's no technical reason why Tivo couldn't eventually be embedded in future high-definition digital television sets.

Tivo CEO Tom Rogers, speaking at the All Things D industry conference last week, said Tivo no longer is an industry renegade, but is weaving its way "into the fabric of the media industry." It helps, he said, that  rather than fighting DVRs, media execs have concluded that "fast forwarding of commercials is here to stay," and are coming up with more compelling, more finely tailored advertisements that consumers might actually choose to watch.

Programmers and ad agencies are working more closely with Tivo, which now is offering real-time feedback on TV watchers' viewing habits.

Recently, Tivo announced higher profits, but largely due to cost cuts, not new subscribers. In fact, subscribers have fallen because Directv (DTV) has stopped markeing Tivo in favor of its own DVR technology.

Tivo has been winning court victories in a patent lawsuit against Dish Network and Echostar (DISH) over DVR technology. Today, the satellite providers counter-sued Tivo. The outcome of this dispute will strongly affect how quickly and broadly Tivo technology will spread.

Comments

[Scott Berry]

While it's true TiVo is going increasingly to an IP licensing business model, they still are working to differentiate their boxes. Furthermore, until they start putting disc drives inside TVs (and I see no reason why mfrs would drive up their prices by doing so), separate DVRs aren't going away.

Incorporating a cable box (tuning, decoding) is a different prospect than incorporating a DVR.

[ROstowari]

Not true. Newer TVs now have built-in hard drives and all you need is a broadband connection (such as cable) for TiVo to download it's software for full DVR functionality. No disc drive necessary!

[Scott Berry]

I beg to differ. There are a few models (LG did this as far back as 05 or 06, I think) with Hard Drive but I don't see it as a trend that consumers will ever adopt. Can you point to many new models that are actually getting sales traction?

Mfrs will price their sets out of the market unless they all conspire to have hard drives. Similar to built-in DVD and VHS players--a niche only. People won't want to repair/replace TV if disc drive fails. Just can't see it.

[OER]

It is possible to load a TV with Tivo software, and have an external SATA connection. The external disk drive would still be "another box" though.

[not so wise]

I think the courts will fid for Tivo big time - Echo Star has been making a mockery of the courts deciding that Tivo has valid patents

Tivo is a company that turns its patents into products - the courts like that and favour that kind of ethic

On top of that it is now not just a patent issue but the courts authority issue. I suspect that will slap down Echo Star big time