In what looks like a brilliant move for both TiVO and consumer electronics device manufacturers, TiVO today announced a stripped down version of its service. TiVO is licensing technology that can be embedded into devices such as DVD players, televisions, cable boxes and other devices that connect to televisions. The technology will enable consumers to pause live TV and record up to three days of programming instead of the 14 days that its full service allows. Additionally, the basic service will not offer a search capability as well as other programmable features available in its full service.
What's smart about this move, provided TiVO can persuade more than just the two consumer electronics companies that have signed on to date (Toshiba and a yet unannounced company), is that TiVO becomes a value-add for devices that offer the service. And from what I can tell, this service will be free. That is, the cost will be built into the price of the device. Even better, the service is upgradeable. It's like offering a trial or demo version of the product but getting manufacturers to ante up for the ability to differentiate or add value to its products.
This is also a defensive move as it helps position TiVO as the leader in PVR (personal video recorder) services. Replay TV (now SonicBLUE) which has had its own issues and problems over the years still has not been a formidable competitor.
TiVO's popularity continues to boost its revenues. This licensing move will help the company increase margin while continue to minimize its dependency on lower margin hardware sales. To be sure, TiVO has licensed its technology to Sony who offers a Sony Brand of the TiVO box as well as a Sony Satellite REceiver with an integrated TiVO device.
Considering TiVO introduced its home media option last month, and the convergence of home computer networks and television and entertainment systems, I'm anxious to play. With Apple's Rendezvous technology rumoured to appear in future TiVO hardware sharing music and video with the non-computer users or visitors to your household gets easier and more likely a realistic option.
