. . . Tuesday November 23, 2004

TiVo Can’t Sell Itself

TiVo had a mixed earnings report. On one hand, they have a whole lot of new customers. On the other hand, about 75% of the new boxes out there were sold by DirecTV.

There are a few problems with this trend. First, TiVo only gets about a buck thirty a month from their DirecTV customers (contrasted with the $13 a month they get from other TiVo customers). Second, DirecTV might soon start offering other brands of DVRs to their customers (or just take TiVo out on the cheap – Murdoch could sneeze and accidentally by these guys). Third, and really most important, this trend is evidence that DirecTV does a better job of marketing TiVo than TiVo does. Just compare the commercials and other marketing materials.

Remember the original TiVo ads where a guy pauses a football game and then goes and prays that an upcoming field goal would be good? Hey, pausing live TV is a cool feature. But all of the ad dollars should’ve been focused on explaining to the masses what TiVo really is. A new-fangled, easy to use, VCR that let’s you record a season of shows with a couple of clicks.

Seriously, how could they miss that part of the sale? And just to confirm that they really, really don’t get it, TiVo started to add new features like photo sharing and the like. Terrible move. Why add something you’re bad at instead of focusing on selling your core functionality? Take a look at these outtakes from their earnings conference call. They are moving to further geek a product that’s already being sold as geeky. Why go for the niche when the masses need what you’ve got?

In many ways, it wouldn’t be a bad idea for TiVo to just give the boxes away. Once your DVR is loaded with shows and season passes, switching costs become high. But at this point, I doubt TiVo has enough financial umph to give away enough boxes to make a difference.

A perfect product. A great model. I just don’t get why these guys could never figure out how to succeed in a market of their own creation.

Concentration is important!