Market Insight

Tivo to release software version of its DVR

November 29, 2007

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Partnering with Nero AG, Tivo plans to integrate a software based version of its television user experience into upcoming versions of Nero's CD/DVD writing application (which is also called Nero). This will allow Tivo to make its services available to PC users across the globe. It will also allow PC users to transform their computers into TV PVRs providing they have access to TV content via USB or card based PC TV Tuners.


A major obstacle in the growth of media center PCs has been providing users with a satisfying television viewing experience. The current major players in this field are software companies such as Microsoft with the media centre functionality of its Windows (XP and Vista) and MythTV which is an open source project. Both of which have had limited success. Where Tivo is different is that it has had success and experience providing PVR subscription/content management services using its own user interface on both dedicated Tivo set-top boxes (STBs) and embedded into payTV operator's own STBs. Subscribers have paid for these services on top of their paid-for content charges.

Content is another obstacle and one that Tivo could struggle to overcome. Acquisition of paid-for content requires CAS and Middleware licenses. For example all STBs for German satellite payTV operator Premiere have CAS and Middleware embedded inside them and are sold via retail channels. STB manufacturers wishing to sell STBs for German satellite payTV operator Premiere have to pass a certification process before being allowed to do so and have Premiere's CAS and Middleware embedded in their STBs. The majority of payTV operators that sell their boxes instead of renting them use this model. It's highly unlikely that payTV operators would open there systems as this would leave them vulnerable to content theft which is the exact problem that CAS is supposed to prevent in the first place.

This leaves free-to-air (FTA) content. Most people that receive FTA content don't want to pay for TV or for high value PVR STBs. Those that do are more likely to go to the high street and buy an off the shelf PVR than set up a PC in their living-room and subscribe to a Tivo style service. Viewers watching FTA content on a secondary TV set are even more unlikely to pay for a subscription PVR service. In fact terrestrial analogue switch off has driven the digital STB market much more than the few extra channels viewers gain from having a digital STB.

Tivo has been particularly successful in the US where there are many hundreds of channels. This makes the electronic program guide (EPG) busy and complicated to use. Tivo's product help viewers organise these channels and find the content that they wanted to watch by analysing viewing habits and recommending content and simplifying the EPG. It failed when it launched a similar service in the UK because it did not have the support of the payTV operators and there are only a few tens of FTA channels. The organisation of which does not warrant the subscription fee. There is a similar situation in many countries.

Where Tivo could find success is if they can marry the limited FTA broadcast channels with content available from the internet and integrate their service making this wealth of extra content easily accessible for the viewer.


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