TiVo’s Q1 Call: Series3 Lite, Comcast Rollout, Down Under

Dave Zatz —  May 31, 2007 — 29 Comments

tivo-call.jpg

As I’ve mentioned before, I’m not a financial guy — it just doesn’t interest me and early on I decided not to buy or sell TiVo stock given the leaks and embargoed info that comes my way. Forbes seems to think TiVo posted a “narrower 1Q net loss” while Reuters tells me TiVo posted a “quarterly profit.” Either way (both?), TiVo performed much better than Q1 of the prior year… Most likely due to lack of advertising. Meaning the current $15 million “My TiVo Gets Me” advertising blitz is going to make Q2 look pretty bad on paper.

So now that the financials are out of the way, let’s discuss TiVo’s upcoming product lineup.

Series 3 Lite

According to CEO Tom Rogers:

Second, we did not have a lower-priced mass appeal HD offering. As we indicated last quarter, given the price of our Series 3 unit, we have not been able to meaningfully participate in the HD wave in retail. without having a mass appeal priced HD unit to participate in the real key trends that you want to see in consumer electronics today, it’s difficult and until we have that product later this year

I’m not sure who advised them to create an $800 DVR (Series3), but I’m glad they’ve seen the error of their ways and will attempt to reach out to the mass market. Unfortunately, they’re doing a good deal of damage to their stand-alone business while folks continue to add cable and satellite HD DVRs. As no one buys anything during the summer travel months, I assume we’ll see a Series3 Lite hit in September or October in time for holiday shopping. As to how TiVo might cut costs, they’ll use cheaper components and leave out some of the S3 polish such as that OLED display.

Comcast Motorola TiVo

According to Tom Rogers:

Comcast’s plan, and I’m now quoting Comcast directly, the Comcast TiVo trials will continue into early summer with a commercial launch plan for August. The commercial launch will be in parts of our New England division, including Metro Boston, Southeast Massachusetts and New Hampshire.

After more than two years, we have a launch date and location for the Comcast Motorola TiVo! Too bad it’s not in my neighborhood… Though maybe that S3 Lite will be economical enough that I won’t bother with Comcast’s offering. It’s yet to be seen what effect these continued development delays will have… This summer, new HD DVR deployments will be separable security (CableCARD) boxes rather than the current Moto 6412 units. Have TiVo & Comcast begun work yet on another software customization? Will new Comcast customers be out of luck for a year?

TiVo in Australia

According to Tom Rogers:

Australia’s leading broadcast company, where Seven will market and distribute TiVo products and services in Australia and New Zealand. The Seven relationship is meaningful because it is a partnership with the most significant media company and leading broadcaster in the Australian market. What is even more exciting about this is that the hardware will be based on the digital terrestrial DVD-T platform that has emerged as a major worldwide standard

I was pretty excited to come home yesterday and see the news that TiVo worked a deal Down Under. However, given the EPG wars in Australia and the sloooooow Comcast dev effort, I’m not holding my breath this will launch in the first half of 2008 as suggested. Also, Davis Freeberg points out that TiVo will be regionalizing (aka “neutering”) fast forward to move slower.

TiVo is the only DVR that streams Netflix

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29 responses to TiVo’s Q1 Call: Series3 Lite, Comcast Rollout, Down Under

  1. Thing is, you can pick up a Series3 for just over $400 after rebate from Amazon right now. I don’t know if TiVo or Amazon are losing money on this deal, but if not, why not just drop the price of the standard unit rather than releasing a $300 or $400 box? Of course, if when Rogers says “lower-priced” he means sub-$200, you wouldn’t hear me complain.

  2. I doubt Amazon would take a loss on it, but TiVo might gamble a bit since 50% of rebates don’t get paid out. $400 for the S3 is almost reasonable, but they’re still fighting an unfair battle when Comcast doesn’t charge anything upfront. As good as the UI is, most Americans are very price sensitive. We like Souhthwest Airlines and Walmart.

  3. I think it would make sense to roll out the Series 3 Lite during the summer – let the early adopters use the first version of the software, and let holiday buyers get a version that’s had the major bugs stomped out.

  4. Even at after-rebate pricing of $400, the S3 still doesn’t make sense. HD is great, but no HMO, no TTG– two of the things that make TiVo so great.

  5. i live in metro-boston, score.

  6. If I can’t transfer my lifetime subscription from my current Series 2 TiVo, I won’t be upgrading to Series 3 unless they’re giving them away.

  7. I’ve been a TiVo fan for quite some time – and I’ve held off precisely due to the price of the unit, and the fact that they ditched the lifetime sub option. Sure, it was nice they offered free transfers when they launched the S3, but the S3 was so expensive at the time…

    But with this $400 deal through Amazon… I’m thinking about it. I recently got my first HDTV and got a Comcast DVR box. Pretty much everything I record with it is HD. And I *hate* the interface. Hate hate hate.

    I’ve been debating on waiting on the ComMotoTiVo but I figure Comcast will figure a way to muck up that interface as well. :/

  8. Another thing… as far as transferring lifetime subs – just poking around TiVo’s site, it basically says rebates aren’t honored if the unit in question isn’t being set up with *new* service. They won’t honor a rebate on a new unit that you’re going to use as a replacement for another (i.e. if you’d pre-paid for the subscription and wanted to move it over). FYI.

  9. Why would I spend money on a Tivo box, AND pay the monthly fee, when I can just get an HD box free with the same monthly fee from my cable provider????? Yes, the capacity of the the Tivo HD box is better (and maybe a slightly better interface, but it’s definitely not worth more than $100 or so.

  10. For those commenting about a transfer of a lifetime sub to an S3, many on the TiVoCommunity message boards report still being able to obtain the lifetime transfer by calling TiVo customer service (for a $199 fee I believe, and I think you get another year of service on your S2 as well). I guess they are still doing it unofficially after the original promotion expired.

  11. If only, if only… they’d get back together with DirecTV. The DirecTiVo is a sweet product, but will not support any HD beyond the current ~10 channels. It’s terrific for broadcast (and fills up quickly during sweeps) and has its own nasty quirks (overnight hangs, f’rinstance), but I’d hate to use a DirecTV DVR that isn’t TiVo.

  12. I just recently upgraded to HD, and decided to try the DVR from Cox Cable (which costs $15/month – that means _not free_). The interface isn’t just a little bit worse, it’s like driving a Porsche and then getting a Saturn as a loaner.

    However, until the pricing is more realistic I am sticking with the Saturn.

  13. Michael Portuesi May 31, 2007 at 1:56 pm

    So the Comcast Tivo comes out in “August”, on the other side of the country for me.

    I’ve said it before: I’m glad I spent the $$ on the Series 3 rather than waiting for the Comcast Tivo. I don’t believe folks in Boston, et. al will be seeing the rollout in August, and who knows when it will reach my area. I’ll have gotten at least a year’s worth of viewing out of my S3 by then.

    Contrary to what someone else posted, the S3 does support HMO. It lacks support for TTG and MRV (multi-room viewing).

  14. I’ll say what I’ve been saying for some time.

    If the Series3 lite ditches the CableCARD, adds a single component input and an IR blaster to control an HD STB it should be a a LOT cheaper for TiVo to make and would enable them to add back in the HMF they stripped out of the current Series3.

  15. All future TiVo devices will be CableCARD based. Tom Rogers has spoken publicly about this. The cost of building a Series3 has already dropped considerably, and I’m sure could be reduced further by purchasing smaller die parts.

  16. If that’s true then I guess that TiVo is doomed to lose me and people like me as customers.

    I can’t see how TiVo would be OK with simply giving up the 25% to 40% (depending on the statistic) of pay TV households that have satellite service. Especially considering all the people who are already TiVo users with DirecTV, would TiVo really rather have these people switch to the NDS DVRs when they want to upgrade to HD?

  17. Another thing I mentioned in my first post but wanted to elaborate on.

    It’s the Cable Labs restrictions that force TiVo to disable features like TiVoToGo and Multi Room Viewing, if they go down the CableCARD only route they are carving off a significant part of their feature set and reducing their competitive advantage over the Cable & Satellite provided DVRs.

  18. Robert,

    TiVo has not worked with DirecTV for years now. The older TiVos are legacy products. DirecTV has not offered a TiVo since their agreement soured.

  19. Scott: DirecTV and TiVo agreed to extend service through 2010 and not to sue each other during that period. With the change in ownership/leadership, maybe closer ties are possible again.

  20. Robert,

    Capturing HD component isn’t a viable solution for home DVRs, the capability isn’t there yet. I’ve looked at component capture cards for PCs, and they don’t do HD. On top of that, quality will always be less than the native DVR that can capture the digital data.

    The satellite vendors don’t want to allow in 3rd parties like TiVo into their system. Unless that changes, satellite will be locked into their own DVRs. If TiVo wins the appeal with EchoStar, things may change.

    Cable and antenna is a huge market, and now TiVo is expanding overseas where systems are more standardized, like DVB-T.

  21. People were getting new DirecTV TiVo units, as recently as last year, there are just tons of existing units out there still in use that will eventually be made obsolete (probably in 2011 when the TiVo/DirecTV the agreement expires) by DirecTV’s switch to MPEG4 or the adoption of HD. but for now these people are all already TiVo users that I wouldn’t want to lose if I were TiVo.

    Just because there aren’t HD capture cards out there now doesn’t mean that TiVo couldn’t make a TiVo DVR with HD component input, if component can carry HD signals than it can be captured just as well as it can be displayed.

    I understand that the picture quality would suffer somewhat from the analog to digital conversion and that the Mb/Hour cost would be higher but that’s the exact same situation we are in right now with Stand Alone Series1 and Series2 units.

    The satellite vendors (and the cable companies) have never liked third party devices like TiVo. Video inputs and IR blaster control was the workaround TiVo implemented for SD and it should work exactly the same for HD. It would be great if Congress mandated a standard for all pay TV like they did with CableCARD but the workaround is still there.

    If TiVo prevails against Dish Network there is always the possibility that there will be a HD DishTiVo (which is what I’m hoping for as a Dish Network customer)

    I agree cable is a huge market, though I’m not sure that antenna is. Though Satellite is a large enough market that it would be IMO stupid for TiVo to write it off, especially if (as I’ve already mentioned) they end up eroding much of their competitive advantage with crippled CableCARD TiVos. Speaking for myself, I use MRV constantly, I also regularly use TiVoToGo, without those features TiVo doesn’t offer me all that much.

    I still have SD even though I have an HDTV because for right now having TiVo is more important to me than having HD is, how long will this continue to be the case? How many other people are there who aren’t as passionate about TiVo as I am who will without a second thought just get the Dish or DirecTV DVR when they want to upgrade to HD.

  22. Robert,

    Technologically can an analog HD component stream be captured and compressed in real-time? Yes.

    Can be be done in hardware economical enough for consumers? Not yet.

    The Slingbox Pro can accept 1080i HD component input – but it isn’t encoding HD. It down-samples to SD first, the encoded output is 640×480. It is very *nice* SD, but still SD.

    Being able to compress 1080i in real-time means handling 6.75 times the volume of data needed to compress SD in real-time. You need much more powerful hardware than found in any TiVo, or any DVR for that matter, today. Hardware that would cost a lot more than the hardware in the S3 – meaning the cost of the box would be more, and the S3 is already too expensive.

    You have to look at it this way – how many people will be willing to spend more on a box that is going to give them one tuner, lower quality video, and still require them to have a full receiver and deal with the IR blasters, etc?

    It doesn’t make sense for TiVo to develop such a box unless they can sell enough of them to make money doing so. We’ve already seen that boxes priced like the S3 don’t exactly fly off the shelves, imagine a box in the S3′s price-range that had all the disadvantages of an S2 (IR blasters, external receiver), and produced lower quality images than the other options. I don’t see that as a hot seller.

    And engineering resources are finite. Why should TiVo devote resources to that project when they have Comcast and Cox paying them to work on OCAP, Cablevision Mexico paying them to work on a version for them, and now Seven Network paying them to do the engineering for DVB-T systems. The payoff from those projects can be huge, and there is low cost to TiVo since the partners are fronting development money.

    DirecTV and Dish Network are actively antagonistic toward outside vendors now. The only real hope is that TiVo wins on appeal and/or Liberty Media decides switch DirecTV back to TiVo once they take over from News Corp. (Liberty Media is a major investor in TiVo.)

    Or, in time the costs of hardware that can do real-time analog HD capture will come down and maybe it’ll make such a box economically feasible.

  23. I think an MPEG-2 encode of an SD signal takes a reasonable percentage of a modern 4GHz Intel CPU–don’t know about the dual CPU part. So that if you need to encode real time you might have trouble doing more than two or three. Obviously HD CPU and bandwidth requirements would be substantially higher. Suspect that Megazone is right, and there would be no way to produce such a thing for under the current S3 price, and it would still only do one channel at a time.

    As for a low-price S3, I would think they would drop the dual-cable card support. Even with just the internal QAM decoders and one cable card slot filled with a single stream card, I’d be perfectly happy most of the time. Sort of like the “Dual Tuner” model I have now, just for digital. And when multi-stream cards come out (they’re past certification at cable labs now from what I’ve seen on the web), even this restriction would go away.

    They need to comment soon about multiroom (and TTG) support and maybe OCAP so that we don’t all feel like the S3′s we buy will become non-functional once switched digital deploys…

  24. Morgan – Because the boxes put out by the cable companies are generally garbage.

  25. Really we don’t know how much TiVo pays Cable Labs for every CableCARD equipped TiVo they produce, I still think it may be possible that the money saved by not handing over the CableCARD licensing fee might be enough to more than pay for better encoding hardware, though obviously I understand this is a big might.

    Also there is no need to encode 1080i, 720p is the more common HTDV format in use and is a bit more bandwidth friendly.

  26. Robert,

    Yes, there is a need to encode 1080i. For one, I would not buy a box that only did 720p, period. I know I’m not alone in that. There are channels that I watch that are in 1080i, they need to be recorded. Actually, I think I watch more 1080i content than 720p. And I have a 1080p set, and I’d want as much 1080i content to best take advantage of it as I can get.

    I don’t know the precise amount of any fees, but from conversations with people in the industry, they aren’t very large. It’d never cover the costs of analog encoders.

    On top of that, I love the S3 – and I simply would not buy a box that did component input only. Period. Some of the reasons I was willing to pay for an S3 were to NOT have to have a cable STB, to NOT have to deal with IR blasters, and to NOT have to accept quality loss. Take those away and the S3 would not be worth the price, not even at $400. If it isn’t dual-tuner with direct digital recording for maximum quality, it is not worth it. Especially when you’d still have to rent an HD cable box – two if it even tried to be dual-tuner – and deal with the clutter, IR blasters (double the fun if you tried to control two boxes), etc. More hassle, more cost, and lower quality. Not compelling.

    TiVo’s CEO said all of their future boxes will be CableCARD, that’s the direction the market is going (in the US at least). Maybe some day they’ll have another satellite offering, but it doesn’t look like it will be any time soon.

  27. Fair enough, you and people like you would never buy a Series3 that had analog inputs, of course for me and people like me, even if we wanted to, even if we were willing to live without most of the features that make a TiVo better we couldn’t get a Series3.

    Plus there are others who don’t know the difference between 720p and 1080i and still others who think they have HD because they have an HDTV when they really have SD content being driven over RF to that HDTV

    One thing I’m curious about, since you are an apparently happy with your Series3, were you not using features like TTG or MRV? Or were those features simply not as important to you as HD? Obviously TiVo has a better, more refined and more stable interface but is seems like feature wise the Series3 isn’t a lot better than the DVRs your cable/satellite company offers for a whole lot less money.

  28. I can live without TiVoToGo, but lack of Multi-room Viewing hurts. Though I fear even if/when they turn it on, they either won’t move HD content or it will be too slow to be useful.

    I don’t know that I can tell a difference between 720p and 1080i, and of course there’s no real 1080p content out there to compare to regardless of what someone’s television is capable of.

  29. Robert,

    I did use MRV on my S2 boxes, but that was mostly to handle tuner conflict issues. I’d use the S2 in my bedroom to record shows that conflicted with a show I was recording on the S2 in my living room. Since the S3 is dual-tuner, my need for MRV dropped dramatically. I do miss it from time to time, but I can live with it. I do hope they work things out and get it enabled later.

    TiVoToGo I used even less than MRV. I think the main use I put it to was compiling an archive of The Tick! (The animated version.) I played with it, moving video to my laptop and transcoding for my Treo, but, honestly, it didn’t excite me. It was more hassle than it was worth.

    Instead I have a Slingbox Pro and I access my S3 real-time from my laptop or Treo now. No transcoding, no copying, etc. Immediate access to anything on the box, from anywhere. That’s a superior solution for me.

    I’ve used cable DVRs, and TiVo’s interface isn’t just better – it is VASTLY better. And feature-wise the cable DVRs don’t measure up either. They tend to be lucky to match basic Season Pass abilities – some cable DVRs have issues just recording first-run only, etc. None of them match WishLists, and I use them a lot on my TiVos. Some of the things I do with WishLists I could partially fake with Season Passes – instead of a Title Wishlist I could do multiple Season Passes for shows that air on multiple channels – but for most things I couldn’t – I have an number of Actor, Director, Keyword, and Category WishLists.

    I also subscribe to a number of TiVoCast channels, and I’ve been using Amazon Unbox on TiVo fairly regularly now. I also make use of the music playback and, to a lesser degree, photo viewing.

    I held off on going HD for a few years. I really don’t watch a lot of network TV, so I still only get a handful of my shows in HD. My cable operator doesn’t have HD versions of some channels – like National Geographic HD – which I’d use. The good thing is, the S3 produces a noticeably better image from SD digital cable channels than the S2 with a box did, so I get benefit there as well.

    I purchased my last SD television in 1994, a 32″ set. I told myself then that I’d keep it at least 10 years, then move to HD. (Even in 1994, HD was ‘coming soon’.)

    Of course, in 2004 I was a TiVo user, and not willing to give that up. There also wasn’t a lot of HD content yet (less than today) for me, and HD sets were still pretty costly. So I waited for the S3 to come out, and then I made the jump – got a 61″ DLP and the S3. It was worth the wait – I could afford a larger, better screen and the S3 is a great box.

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