Wednesday, August 29, 2007

Is Comcast on its Way to Owning Tivo?

Tivo didn’t have a great quarter, losing $.18/share. I don’t need to wait around to listen to the earnings call to hear the spin they put on this. Tivo keeps bleeding subscribers – they lost another 145,000 for the quarter. While it’s no surprise that they continued to bleed subscribers from DirectTV, they even lost 19,000 net of their own non DirectTV subscribers (last quarter they added 1000 in that category).

The good news is they apparently got 41,000 “Tivo Owned” subs added for the quarter, but unfortunately they lost 60,000 at the same time.

Separately there was this filing indicating Tivo needed additional investment from Comcast for the plans to get Tivo software on Comcast’s DVRs. It seems to be taking forever. Meanwhile Tivo's bleeding and Comcast is probably not miserable over that.

I don't want to hear the yadda, yadda over the magnificent $299 HD DVR. Though cheaper than the Series 3 it's still a product for gadget geeks (which means I will actually probably buy one). The new model has two things going against it. Even at $299, it's $299 more expensive than Comcast (or other cable providers). You can rent the Comcast box with a program guide for cheaper than you can purchase Tivo's program guide.

Is Tivo's DVR better than the cable supplied DVR? In almost every way it is. But it's not $299 better. Not for most people. The one way it isn't better is this: the DVR uses CableCard technology replacing the need for a set top box. However, the current CableCard technology does not allow for using interactive features such as On Demand. Once you've used On Demand, you're not likely to want to give it up.

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