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To DVR Or Not to DVR

It is hardly surprising that as digital video recorders (DVRs) become more ubiquitous, their basic function (i.e., automatic time shifting of television shows) is rapidly becoming commoditized. When TiVO was introduced in 1999 it revolutionized TV by giving users control of what they watched, when they want to watch. So as that feature spread to other devices—and especially once DirecTV stopped licensing TiVo technology for its set-top boxes—it is only natural that pundits would begin declaring the death of TiVO. Can TiVo Reinvent Itself in Time? [paidContent].

But TiVO has never been a simple DVR device, Coupled with a smart filters, custom recommendations and a sophisticated “season pass” feature, TiVO offers to consumers a software-based platform for customizing the television experience, while it simultaneously offers advertisers and broadcasters a tremendous wealth of valuable data on viewing habits. Moving into the next decade, it is this information aggregation function that promises to be the value proposition for the business going forward.

With its highly intuitive and user-friendly software, TIVO is better-positioned than anyone else to help users sift through and manage “infinite choice” in the same way Google has made the Web itself searchable. Recording linear TV for later playback will continue to have its place, but as more Internet-delivered video comes to television screens, TiVO will be the front-end portal through which subscribers access TV, video-on-demand, broadband content, interactive services and advertising.

To me, this says that TiVO’s biggest competitor is not stand-alone DVR machines, but rather the advent of on-demand video devices like Netflix-enabled Blu-ray players, Roku boxes and AppleTV. The biggest question is whether the need for local storage of videos, whether on a PC or DVR, will survive the transition to Web-enabled streaming video. As sites like Clicker.com make Internet video fully searchable, is there enough value-added with TiVO to convince consumers to continue to buy a hardware device in order to get access to software?

Prediction: Within five years, the market will see TiVO-branded software for multiple operating systems, leveraging the company’s technological superiority in a way that Hulu and the like have not as yet even tried to match.

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