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December 5, 2006

Thoughts on DVR vs Tivo

by Joshua Minton

My father-in-law called me last night to tell me that he purchased a Direct TV HD-DVR for $200. He was the first in the family to purchase a High Definition Samsung 50" DLP television and he bought the DirectTV HD-receiver at the time. The receiver did not pick up local channels so he had to buy an external antennae to pick up the local stations in HD.

He had a Tivo Series 2 at the time (and a Series 1 as well, which he purchase from my wife and I when we upgraded to our Series 2). But the Series 2 Tivo wouldn't record in HD and he ended up watching the majority of his shows in less than Standard Definition in spite of paying the premium through Direct TV for their High Definition package.

So, when his DirectTV HD-receiver started going on the fritz (after only two years, mind you); he broke down and got the HD-DVR. He said it will record 50 hours of HD programming or 250 hours of regular programming. This is massive.

My own DVR which I pay a $12 fee for through my cable company, only records 30 hours of HD programming but is a dual-tuner meaning I can record two shows at the same as I'm watching something I've already recorded.

Now, he's still underwriting the risk of hardware by purchasing the $200 DVR unit for DirectTV while my $12 a month will get me a replacement if mine breaks but even that is a far cry from the $1,000 that Tivo is asking for the Series 3. And you have to pay a monthly Tivo premium on top of that.

Tivo is now giving away Series 2 boxes but this is something they should have been doing three years ago. See, why do you think DirectTV has become so prevalent in the cable marketplace? Because they're giving away the equipment and encouraging people to leave the dishes on houses when they move. DirectTV can be installed on campers, buses, boats and other large vehicles whereas cable needs a static residence.

Tivo had some great online features that allowed for remote scheduling as well as downloading shows to a PC but these weren't valuable enough services to me to justify taking $1,000 risk on my own shoulders plus paying a monthly premium on top of that.

And guess what? Rumor has it that the Tivo Series 3 won't even work with satellite cable--how insane is that? Why in the world would you leave out such a significant portion of your market when you're striving to keep as many clients as possible, not to mention gaining new ones.

Tivo's demise is a market inevitability despite the one-time superiority of its product. They were the brand to beat in the DVR market at one time but now the brand is beaten and what will follow is the natural progression of the best goods and services bubbling to the top in a consumer market.

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