TiVo Facing Identity Crisis
New report from The Diffusion Group suggests that TiVo must redefine itself as a 21st century media company if it is to survive.
Dallas, TX (PRWEB via PR Web Direct)
July 6, 2005 -- A new report from The Diffusion Group, a leading digital
consumer and new media research consultancy, suggests that as DirecTV phases out
shipments of TiVo DVRs – a relationship that accounted for 70% of TiVo units
sold in 2004 but will account for less than 5% of unit shipments by 2007 – TiVo
will be forced to come to terms with an increasingly competitive market flooded
by free DVRs from video service providers. "Can TiVo Survive? A Case Study in
the Perils of First-to-Market Innovations" argues that though TiVo will look to
new cable and satellite relationships to fill the gap, these dealings will
generate far too little revenue to sustain the company for the
long-term.
"TiVo's new president and CEO, Tom Rogers, will face many
challenges as he leads TiVo into its post-DirecTV chapter," said Scott Kipp,
author of the report and a contributing analyst with The Diffusion Group.
"Service provider relationships will no doubt be the company's initial panacea,
but while such relationships may be cause for short-term optimism, their ability
to contribute significantly to the Company’s bottom line is
limited."
"TiVo's long-term survival requires a major transformation in
its branding and positioning strategies," continued Kipp. "It will simply not
survive as a DVR solution provider. Instead, it must become a true 21st century
media company, combining consumer electronics, digital audio, Web-based video,
and T-commerce strategies, each with a significant Internet
component."
Kipp says that one of the most significant challenges for
Rogers will be simplifying the complex Tahiti vision into a single brand that
says "digital media" to the consumer market. "When consumers think of digital
media content and platforms, 'TiVo' should be the first brand that comes to
mind,” said Kipp. "Pulling off such a major shift in branding from DVRs to
services will no doubt require tremendous marketing and public relations
efforts, as well as building partnerships with other new media players. But
TiVo's very survival depends upon transforming the brand by transforming the
platforms and services with which the brand is associated."
Other key
findings from the new study include:
* TiVo's recent deal with Comcast will
face many difficulties and have little impact, if any, in terms of moving TiVo
DVRs. Architectural differences in software will lead to limited deployments and
compromised functionality (especially when compared to stand-alone TiVos).
*
TiVo's forthcoming Series3 HD-DVR with Multi-Stream CableCard and built-in
networking will be too expensive for most consumers and thus require substantial
carrier subsidies to impact the market. With cable and satellite companies
leasing similar products for little or no upfront costs, the HD models of the
Series3 will see tepid sales.
* TiVo will win its patent dispute with Dish
Network but won't see significant revenue from the litigation.
* TiVo will
remain unattractive as an acquisition target unless its stock falls to record
lows – an event that has been made more likely due to the departure of DirecTV.
Should a suitor emerge, the buyer will most likely be a broadband content
distributor or a large consumer electronics company – an Apple/TiVo merger is
not out of the question.
TDG's new report, "Can TiVo Survive? A Case
Study in the Perils of First-to-Market Innovations," provides an examination of
a variety of DVR and digital media subjects, some of which include (1) the
unique evolution of TiVo as a company and technology purveyor; (2) the
competitive environment in which TiVo now finds itself; (3) profiles of relevant
competitors; and (4) the viability and likelihood of partnerships with Google,
Yahoo, Apple, Sony, and online content purveyors such as MovieLink and
CinemaNow. The report also offers TDG's latest forecasts for video subscribers,
TiVo unit shipments and subscribers, as well as strategic recommendations as to
how the Company can survive for the next five years.
About TDG Research –
The Diffusion Group is a consumer technology research and strategic
marketing firm focused on the connected consumer and new media. Our mission is
simple: to provide timely, actionable intelligence designed to best position new
consumer technologies for rapid diffusion. TDG is committed to providing market
research and strategic consulting services based on conservative, real-world
analysis and market forecasts grounded in consumer research. For more
information about The Diffusion Group, visit our website at www.tdgresearch.com.
Contact:
Andy Tarczon
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214-677-9723
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Source : http://www.prweb.com/releases/2005/7/prweb259001.htm