Anil Sharma's  Instablog

Anil Sharma
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I am an independent learner who is interested in thorough research and analysis before taking a buy or sell decision on a stock or ETF. With about 12 years of tech industry experience along with an MS and an MBA, I hope to add value to your investing decisions.
  • TIVO: Lost innovation? 3 comments
    Aug 18, 2009 2:04 PM | about stocks: TIVO, CMCSA, T, VZ, NFLX, MSFT
    In last few years, whenever we had seen major movements in TIVO’s stock price, noticeably they were mostly related to legal announcements against its patent portfolio law suits. That would make you think whether this is all that TIVO has become now, a legal battle. TIVO came out with digital video recorder technology in 1997. That was real pioneering work and TIVO rightfully got patents on various technology components of DVR service delivery system. Dictionary definition of patent is “A government protection to an inventor, securing to him for a specific time exclusive right to his invention”. However looking at the attempts the other TV service or content vendors have made to monetize DVR service themselves by circumventing TIVO’s patents in recent past, one would think if it is enough to have government protection in current competitive world of technology business. Rather than honoring TIVO’s rights and licensing the technology, many companies with financial muscle or access to the end customers have tried to work around and deliver the service using their own technology and devices. It had been proven so far that these systems have used the concepts developed by TIVO in one way or the other.
    Probably TIVO’s size is the main issue because of which it is not able to quickly scale and fully monetize its invention even before others allure to this market space. It may also be that TIVO is not properly placed in service delivery value chain. May be if it has proper forward or backward integration with TV service providers or content owners, it would be able to scale fast enough to capture the market and not leave enough financial incentives for other vendors to enter this space. After availability of TIVO’s software only version, it has become even easier for other big vendors to fully imbibe its technology and integrate the company. For example, XBOX (NASDAQ:MSFT) can use this technology in much more profitable way and capture more adult users for the box. May be Comcast (NASDAQ:CMCSA) can use exclusive rights on TIVO technology to differentiate itself after AT&T (NYSE:T) and Verizon (NYSE:VZ) have substantial coverage with their faster content delivery networks and wipe out cables’ main advantage. Certainly it would be helpful for TIVO, if they are part of a bigger company as that would deter other vendors from encroaching on its innovations. Although Netflix (NASDAQ:NFLX) is not that big but even if TIVO and Netflix combine together, they would both benefit as Netflix would get a connected Box at customer end and TIVO would get access to content. They will also both have bigger negotiating power while dealing with at home entertainment providers. After all size and proper relationships do matter, when it comes to protecting once competitive advantage.
    Disclaimer: Long TIVO
    Stocks: TIVO, CMCSA, T, VZ, NFLX, MSFT
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  • spiegari
    , contributor
    Comments (2) | Send Message
    Hi Anil,
    I am doing some research on TiVo and it will result in a presentation of a five year plan of TiVo as of now. I was wondering if you could explain a little more what you meant by,"It may also be that TIVO is not properly placed in service delivery value chain." Or if you had any suggestions for putting TiVo on a profitable five year plan whether is be through more partnerships or re evaluation of partnerships... it could be anything. I would appreciate any input. thanks
    8 Feb 2010, 01:14 PM Reply Like
  • spiegari
    , contributor
    Comments (2) | Send Message
    Hi Anil, I was wondering if you could explain this alittle more: "It may also be that TIVO is not properly placed in service delivery value chain."
    I am doing some research on TiVo and presenting a project of how i will set them on a five year track that is profitable whether it be through new partnerships, re working current partnerships... it could be anything that makes sense financially and it profitable. I was wondering if you had any advice on this? any feedback would be helpful
    8 Feb 2010, 01:19 PM Reply Like
  • Anil Sharma
    , contributor
    Comments (4) | Send Message
    Author’s reply » When I look at who create content, who has ownership and sells it and who delivers the content finally, I don't see TIVO having strong pull in any of these areas as such. More over there are very big companies with strong control in each of these categories. Somehow, I feel TIVO needs much stronger presence in one of these areas.
    16 Feb 2010, 09:31 AM Reply Like
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