Will Cable Beat Tivo?

Tivo is turning out to be a fascinating business case to study. I wrote two weeks ago about what a marketing failure Tivo has been. Now a NYT article wonders if Tivo will be beaten by cable providers.

A few weeks before the P.G.A. Championship golf tournament in Rochester in August, Mr. Palermo, a real estate broker, was trying to figure out how he would record the broadcast.

Mr. Palermo thought about buying a TiVo, the digital video recorder, or DVR. Using a computer hard drive and advanced software, a DVR lets the user pause, rewind and fast-forward even with live television programs. It also provides a much easier way to automatically record programs than is possible with videocassette recorders.

In the end, Mr. Palermo was turned off from TiVo by the prospect of having to connect all kinds of wires and adding a new box to his home entertainment system. So, instead, he ordered a relatively new product that his cable company, Time Warner Cable, a unit of Time Warner, has been pitching: a set-top box made by Scientific-Atlanta with a DVR already built in.

"The fact that we could do this without the difficulty and complexity of a stand-alone thing made this a perfect fit," Mr. Palermo said in a telephone interview on Friday.

Tivo has done a poor job of marketing, and now has wasted their first mover advantage. They should have realized that Tivo is more of an add-on service than a product, and sold it accordingly. FC blog has some interesting stuff on Tivo too.

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