The Change Mariner: Three Reasons TiVo Will Die

March 19, 2004

Three Reasons TiVo Will Die

#1: Moore's Law
The first one, ironically, derives from the same technology that enabled TiVo to live in the first place: Moore's Law. As chips got powerful enough and hard drives cheap enough, the PVR was inevitable. But now the raw materials are cheap enough to put hard drive -- based video recording into just about anything.

It's not just cheap components. Television delivery has changed, too. The original TiVo was designed to suck in an analog TV signal, via either antenna or cable. It also included analog S-Video and composite ports for set-top boxes, which aside from DirecTV and Dish Network were mostly analog, too.

Fast-forward to today. Nearly half of what the industry calls multichannel homes (those with cable or satellite) receive their TV in digital form.

And that's bad news for standalone PVRs like TiVo and ReplayTV.

Reason #2: HDTV

The next fatal problem for TiVo is high-definition TV signals. 2004 will be the year America embraces HDTV. The Super Bowl looked tremendous in HD, movies are amazing, and in May, when ESPN begins broadcasting SportsCenter in HD, the contest will be over.

With the world moving to HD, here comes TiVo -- a year late -- with its own HD PVR. Scheduled to ship in March, the DirecTV combination HD receiver and PVR will cost a staggering $1,000. Cable, again, is about to trump TiVo. Motorola and Scientific Atlanta are readying their own HD set-top boxes, which will again be free to use and will cost about $10 a month to rent.

Reason #3: Rupert Murdoch

The problem is that Murdoch is a rapacious cost-cutter, squeezing margins and hunting for profits at every turn. He has already moved to consolidate the fractured DirecTV set-top market -- where more than ten consumer electronics vendors build their own branded boxes -- into one (presumably cheaper) look and feel. The next step will be for Murdoch to oust TiVo in favor of a lower-cost and less useful but cheaper PVR. And when that happens, you can kiss poor TiVo goodbye.

Hacking TiVo: The Expansion, Enhancement and Development Starter Kit with CD-ROM
John Wiley & Sons

Amazon Price: $20.99

Hacking the TiVo
Premier Press

Amazon Price: $20.99

TiVo Hacks
O'Reilly & Associates

Amazon Price: $9.98

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