TiVo's history is a long and often painful narrative. The company that bested rival ReplayTV in the early 2000s later faced potentially overwhelming competition from cable companies with their cheaper rental set-tops. The retail market became a wasteland for DVRs, and pay-TV providers cleaned up not only with digital video recording features, but also new video-on-demand offerings.
Yet somehow TiVo survived.
A few others tried to challenge TiVo Inc. (Nasdaq: TIVO) in retail, including Digeo, which launched its own overpriced DVRs before being swallowed up by Arris Group Inc. (Nasdaq: ARRS). But none were able to navigate the challenges of CableCARD technology in particular, or the obstinacy of the cable industry in general. Only TiVo.
For all of TiVo's success, however, the company once again finds itself in a precarious position. As CMO Ira Bahr explained recently in an online "Ask Me Anything" chat, TiVo did only 150,000 retail activations in its last fiscal year. Long-time TiVo expert and blogger Dave Zatz points out that's not 150,000 households, but device activations. According to TiVo's most recent earnings report, the company only lost 3,000 retail TiVo subscribers in the second quarter (down from a loss of 20,000 a year ago). However, not only are total subscriber numbers down, but retail purchases include a mix of TiVo's high-end DVRs and its lower-priced boxes like the TiVo Mini, and that means the company's retail revenues are likely in dangerous territory.
Bahr acknowledges the problem, noting that compared to "the millions of streamers out there, and the tens of millions of DVRs out there… [TiVo's] got a lot of ground to make up."
TiVo's plan is to make products designed for more mass-market appeal like the new TiVo Bolt. The Bolt isn't meant for hard-core TiVo fans. It has only four tuners, and the base model comes with only 500GB of onboard storage. In theory, though, some of the new features like QuickMode and 4K Ultra HD support will draw a wider consumer audience. (See TiVo Takes Aim With Bolt.)
TiVo is also going virtual with its platform. It plans to introduce an app for Amazon's Fire TV this week, marking the first time TiVo has supported a third-party set-top with its entertainment software.
At this point, however, it's hard to tell which is more cut-throat: the cable industry where operators have their own agendas for profit, or the retail market where the media streaming wars are rapidly heating up. Just last week, online shopping giant Amazon.com Inc. (Nasdaq: AMZN) announced it will stop selling Chromecast HDMI adapters and the Apple TV. The official reason for Amazon's decision is that the company wants to support products that provide the best experience with its Prime Video service, but it doesn't hurt the online retailer that it's now cut off rivals selling devices that compete with its own Fire TV hardware platform.
TiVo's leverage is limited. It's not in the content business like Amazon, and it's not in the service provider business like its "frenemies" the pay-TV operators. It has no plans to expand into those areas either.
"We are neither content nor delivery -- we are the interface," says Bahr.
Instead, TiVo plans to continue fighting its own familiar two-front war. In the pay-TV provider channel, the company has made surprising progress, even as it maintains a sense of wariness. (See TiVo Hints at UHD Launch in Q3 and DSTAC: 2 Opposing Views on the Future of TV.)
But in retail, TiVo's losses are mounting. And any positive momentum is going to be hard to recover.
— Mari Silbey, Senior Editor, Cable/Video, Light Reading