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.

Lies, Damn Lies and Les Moonves: More Fun with Numbers

With apologies to Mr. Moonves, CBS crushed the competition last week, but I love a catchy headline.

One thing that’s always bothered me and always will because it’s not like it’s ever going to change is the way numbers get used. Misleading statistics make it out into the media stream and then there is this tendency to just start parroting the statistics because they’re out there. Recently I saw this Moonves quote:

"But DVRs are getting counted, and you're seeing that they are not as disastrous to commercials as everybody thought. Nobody would have thought that only [about] 45 percent of people zap commercials. Not only that, but commercials you zap through are still effective to a certain extent. When you see that Crest toothpaste logo, that goes into your brain. More and more people are going to be viewing [commercials] with the logo throughout,” said Moonves in a story on Jack Myers’ mediaVillage.

Wow, 55% of DVR owners don’t zap through commercials! At the risk of some perilous branding here: you have to be kidding me! Maybe it’s true. What I suspect is really the case is that only 45% always zap through commercials. I’m pretty sure the way the data actually works out is that most DVR users zap commercials most of the time when they are watching something time shifted.

That is not the song Moonves was singing here. I do believe that only a small % of DVR users always zap through commercials. I often find myself not zapping through them. Usually it’s when I wasn’t actually paying attention to what I was watching! I watch ESPN’s PTI religiously on the DVR, but I often watch it on my computer and am just listening while I surf the web or try to get the tvbythenumbers.com web site looking much better than what you see here before we launch next month.

I could be wrong in my assumptions and it could be Les Moonves is right. But I’ll tell you what, I’d bet $1000 that the data doesn’t show that 55% of DVR users never zap through commercials. I contacted Nielsen for clarity on the data, but so far my request has fallen on deaf ears (it’s been over a week and I asked more than once). I think the clarity is very, very important, but admittedly it’s far more important if you’re buying advertising based on the numbers that include DVR viewership than it is if you’re selling the advertising.

It’s not just the networks. When it comes to TV data, it’s just plain hard to get. I wanted to provide Bill Gorman with some numbers so he could make a chart on the growth of homes in the US with HDTVs. I tried to compile some data from the internet and it looks like this: (again, I am only talking homes in the United States, not worldwide):

March 2004 1.6 million homes (source = In-Stat)
March 2005 4.0 million homes (In-Stat)
Dec 31, 2006 27.7 million (source Global Analysis)
Dec 31, 2007 52 Million Homes (source CEA)

In the most recent data point provided by the Consumer Electronics Association is projecting end of year stats based on the sales of HDTVs during the first six months of 2007 that a total of 16 million additional homes will be added to the number of homes with at least one HDTV. I have 2, three if you count the plasma screen hanging on Michael Raneri’s basement wall – hey, I have a 61” DLP set, and bigger is better. Hanging the plasma screen on my office wall and using it as a computer monitor seemed excessive, besides it is five years old now and can only do 1024x768 resolution. If it could do 1920x1280, I’d have already ripped it off Mike’s wall.

Enough about me. I don’t take issue with the 16 million additional homes with an HDTV in 2007. But, they say that 16 million additional homes in ’07 brings the US Total to 52 million. I couldn’t find any data showing 36 million homes at the end of 2006 which is more than 8 million more homes than with the data I could find.

It doesn’t mean the data doesn’t exist, only that if it does I couldn’t find it or it’s a stat that is not freely available anywhere. We’ll still probably make the chart anyway and whether it’s 52 million homes or 44 million, it’s getting to be a lot of homes.

But here’s another statistic from the CEA from the same press release predicting the 52 Million homes, 44% of the homes with at least one HDTV receive no HD programming at all.

It’s bad enough that I don’t get Mark Cuban’s HDNet or HDNet Movies channels via my Comcast HDTV package, but at least I’ll be able to watch him dance in HD if the sources for this story are correct.

Who spends all the money for an HDTV and then doesn’t get any content? Apparently a whole lot of people.

A DVR That Makes You Watch the Ads

And at the price of $0.00, it just might freaking work. The service called Look Back will be limited in at least two ways: 1.) the fast forward feature will be turned off (can a mod be far off?) and 2.)it sounds a lot more like an on-demand service than a recording service, with the limitation that you can timeshift, but only before midnight on the day the show originally aired.

This potentially dramatically increases the installed base of DVR viewers and is pleasing as punch to the advertisers. Everybody is happy? I doubt it because of its limitations (it's not really a DVR!) but you can't argue with the price.

8 or 9 years with a DVR

Mike Bloxham over at MediaPost.com wrote a very thought-provoking piece: DVR Divide?

I don't know whether I agree with all the numbers he cites or not, but it doesn't matter because either way there is a divide and adoption hasn't been swift. I believe adoption will accelerate over the next 5 years and that the cable & satellite companies will be heavily promoting DVRs. However, there will be a divide and I might be wrong when it comes to adoption.

I can’t remember exactly when I got my first Tivo, I was one of the first 100,000 subscribers. I found out about it because I had some meeting while I worked at Schwab with Stewart Alsop and if I remember correctly the VC he was working for had backed Tivo. Alsop’s sales pitch sold me immediately – a completely digital VCR and also the ability to pause live TV. I had to have one. Whether that was this time in 1998 or 1999, it has been a good long while now.

I still have that series 1 Tivo. It’s collecting dust. I probably ought to have some type of contest to give it away ( it comes with a lifetime program guide!). Whether 20% or 33% of homes have a DVR doesn’t matter. The adoption curve has not been steep.

The people who love their DVRs make a significant difference on the viewership of many shows according to Nielsen (with as many as 8 million viewers coming from DVR viewership for some shows). Mike’s point was regardless of the numbers there is a difference of behavior between DVR users and those who watch everything live, and that behavioral difference must be understood.

Here, I disagree. Even though it is true that every single DVR viewer will eventually watch some commercials, they will not watch most of the commercials most of the time. If that EVER changes, no matter what kind of behavioral studies are done, I for one will be shocked.

The Internet is My DVR

I first coined this phrase around a month or two ago. I was having a conversation with someone who had bought an AppleTV and while it struck me that he ascribed a lot of things to the AppleTV that were not actually because of the AppleTV, we had similar thinking.

What the AppleTV is, is a media extender. It’s a media extender specifically designed to work with ITunes and that’s what it is. Period. Through a lot of back and forth discussion on this finally I thought despite the discussion, we were really in the exact same place. The thing we wanted was for the Internet itself to be our DVR.

But either people, including billionaires are stealing the phrase I coined or, you know, it just makes so much sense that of course that’s what everyone wants and anyone who thinks about it for even a second will conclude, “Yeah, I do want the Internet to be my DVR.”

For all practical purposes, the Internet is already my DVR, oh I have Tivos and Media Centers and all that recording stuff constantly, but the Internet is mostly my DVR already. It works in a couple of ways:


1. If my goal is to get recorded content into my iPod, it’s faster for me to download a torrent of the program from the internet in MP4 format than it is to take the exact same program off my Tivo or Media Center, convert it to MP4 and then put it on my iPod. Plus, the Internet version is already stripped of commercials
2. Through these sites I do see programs of interest sorting based on # of downloads. For example, I saw that the Larry King episode with the cast of Heroes on it was a top download…and that was something I wanted to watch.

Larry King is against my religion not because he throws softballs to celebrities, but because he’s a fraud. Going back 25 years when he was on the radio he used to tell all these stories about growing up in Brooklyn. One involved a tale with Brooklyn and Los Angeles Dodger Hall-of-Famer, Sandy Koufax. When asked about this story years letter in an article in the Washington Post Magazine (that comes with the Sunday paper) Koufax denied EVER knowing Larry King. I love Sandy Koufax, and I loved the Larry King story about him (it was a bet about Carvel ice cream and how much you could get 2 scoops for in the 50s), but when the story proved to be a fraud, Larry was on the outs with me. I have a rule and the rule is if I know you’re totally on-board with being a fraud, I don’t want to get any of my information disseminated from you.

However, I love Heroes and loved this episode of Larry King on CNN. I was glad to find it, download it AND watch it. I wouldn’t have if the Internet wasn’t already my DVR.

Now I know what some of you are thinking: Aren’t torrents illegal? That is not a question for me to opine on. The question I will opine on is this: do I have a right to use media I have already paid for, for my personal use in any fashion I choose FOR MY PERSONAL use?

Answer: Duh!

Do I worry about the Feds knocking on my door? I hope they knock on my door. I’ll hand them the harddrives and make a name for myself by taking down a completely stupid premise. I mean jailing me for wanting to use media I paid for in any way I choose would be ANTI capitalistic.

Why? Well, for one, I’m already into Comcast to the tune of about $2400 a year for the media, and this doesn’t include ppv, DVD’s purchased or rented, the hundreds of dollars a year I spend on Videogames, the $22/mo. I pay to Blockbuster to be able to rent videogames, the subscription costs for Tivo, etc.

Excluding hardware, my media spend for my personal consumption is probably $5000 a year. I think this makes me an exemplary citizen in the capitalistic system that values people buying media.

If you add in the hardware costs (iPods, media centers, tivos, -- and hey, let’s not forget the plasma screen and the big ass tv and the XBOX 360, and the PS3 and the Wii, etc).

My annual media spend is HUGE. Now, if someone wants to throw me in jail because I found it easier to just download Heroes off the Internet rather than convert the version of it on my Media Center PC…I say let them. I mean if the system wants to put me in jail and take the thousands of dollars a year I spend on media off the table just to make a very self-destructive example, I’m fine with it. It’s exactly the self-destructive kind of behavior (cutting off your nose to spite your face) I love to make an example of and I’d figure out how to use that jail time to make a mockery of these dopes.

Every show is NOT fed into the Internet download population, among them 2 of my favorite shows – the shows I watch the most. ESPN’s “Around the Horn” and “Pardon the Interruption”. Fortunately in the case of PTI, they at least have the audio as a Podcast as is Mr.Tony’s radio show back in Washington, DC. But the video for these shows does not flow into the download library in the way that shows like “The Daily Show” do.

I have a DVR to always have these shows, but there is no easy and quick way to just dump them to my iPod yet – and services that ultimately have the digital equivalent of ON DEMAND for everything, in any format, will be what we pay for. Would I go another $100 a month to Comcast for this service? NO. But another $10-$20? Yep! Believe me when Comcast thinks there are enough people like me to make that interesting, they will.

I’m certainly ahead of the curve and probably by several years on the “I want my media wherever and however I want it” that results in “The Internet is My DVR.”

I basically have already achieved this through media centers, tivos, Sony Location Free Players, the ability to remote broadcast crap of my PS3 to my PSP (location free player does this too) but I have achieved it through great expense and hardware hacks, and it’s still rather clunky as hell Though I do note that recently my ORB server ran uninterrupted with fairly high usage (by me) for over 10 days straight. I know, I know, you can’t believe I didn’t have to reboot my Windows machine for over a week. But it’s true!

The Internet IS my DVR. Someday it will be yours too. And when that happens it will be both CHEAPER (by a LOT) and BETTER (by more than just a little) than what I have today.

DVRs Save Thursday Nights

According to this story from the Hollywood Reporter, ABC had success with Thursday nights for the first time since the Barney Miller days (well over 20 years) by switching Grey's Anatomy to Thursday nights. Because I'm long winded and have not yet refined my writing skills yet let me tell you the most important thing right now: CBS says that HALF of its viewership for the CSI that runs Thurdays vs. Grey's Anantomy is people watching on DVRs. HALF. HALF. That seems...shocking and outrageous...but cool as hell if it's true.

While I did sort of taste the Grey's kool-aide, I did so primarily because it became socially impossible to have a decent conversation with any woman over the age of 33 because there were simply too many Grey's references that I wasn't aware of.

To me, this show has roughly about the same appeal as an Internet chat room or Craig's List. Right in front of you, characters who are way more screwed up and depressing than anything you have going on in your own life. But Grey's notches this up because unlike most flakes in an Internet chat room the people actually have good jobs and are beautiful and ARE STILL MISERABLE AS HELL. This is a show about a bunch of people who have great lives but are chronically miserable as hell.

Anyway, the interesting thing about this story to me was the quote from CBS Research Chief, David Poltrack. Because although CSI on CBS did feel the pain of Grey's moving to Thursdays, it wasn't problematic according to Poltrack.

"In a non-DVR world, this would have been a tough situation for the viewer and for CBS in particular because 'Grey's' comes in there and people have to make a decision whether they're going to watch 'CSI' or 'Grey's,"' Poltrack said. "But with DVRs, people were able to watch both." Half the "CSI" viewership comes in playback mode, according to the CBS data.

Idol Screws Tivo Users

...and users of any DVR. The finale for Wednesday night's American Idol finale ran over by 9 minutes (ending at 10:09p, instead of 10:00p). People who recorded Idol on their Tivo or whatever DVR they used missed out on seeing who won -- which was kind of the whole point of that last show, apparently.



I think that's unfortunate for Idol fans who Tivo'd the show, but I don't see this as a big deal really as idol, unlike most other prime-time programming is shot live, at least on the east coast. Still, Idol is not like a sporting event, say baseball that usually lasts around 3 hours, it's a show that usually ends exactly at 10p, even though it's live. With sporting events I know to go in and tell Tivo to record an extra hour. For things that can be off because of my clock, I compensate by starting recordings 5 minutes early and ending them 5 minutes later, but this wouldn't have compensated for the 9 minutes.

I still don't think this is any big deal though, because, c'mon, it's American Idol, who cares besides the 30 million lemmings who tuned in? The bigger deal to me with this is if I did care, as a west coaster, I would have to have had an information embargo before watching the show. Because before the show even aired in California, the winner was all over MyYahoo, Google News etc anyway. I think Fox out to figure out a way to sell the east coast feed to west coast viewers at a PPV rate.

Frothy west coast Idol fans would surely pay $5 to watch the feed 3 hours earlier. And quite frankly, anyone who is willing to do that should be made to pay...but that's just a personal opinion.