Tom Rogers characterizes the digital revolution in
broadcasting as a shift from decades of “consumer choice” to
a new generation of “consumer control”. His challenge
as CEO of TiVo, a company that packages the latest digital technology
into one complete home entertainment system, is to convince television
viewers to put down their hand-held remotes for an upgrade that
will zap them into the future.
After gaining a small but loyal following of users in North America,
the California-based company recently announced plans to expand
to Australia. The personal recording devices offered by TiVo are
scheduled to hit the Aussie and New Zealand marketplace in early
2008. When they arrive, home entertainment as people now know it
will be transformed.
Not only can TiVo owners set the device to record their favorite
shows, the box also finds past episodes as well as other programs
that have similarities. For example, fans of “Dancing with
the Stars” may discover TiVo has recorded “So You Think
You Can Dance”, another popular reality show.
The recordings are stored on a hard disk that can keep 80, 180
or 300 hours of programming per month. Viewers can re-save or delete
programs once they’ve watched them. TiVo owners are able
to pause live broadcasts and download movies directly to their
televisions. They also have the ability to create a “Wish
List” that commands the TiVo box to record any program featuring,
say, “Australian Rules Football” or “Grant Bowler”.
Perhaps most notably, TiVo gives viewers the option to eliminate
what they don’t want to watch, namely commercials.
“Technology is making it possible, through the easy shifting
of television programming, for viewers to see what they want to
see, when they want to see it, on the device that they want to
use,” Rogers, 51, told shareholders in TiVo’s annual
report released earlier this month.
Despite being a uniquely 21st Century enterprise, TiVo has hardly
ensconced itself. It has a subscriber base of 4.4 million people
in the U.S., Canada, Great Britain and Taiwan. Once the box is
purchased, typically for $100 US, subscribers pay a monthly fee
of up to $19.95 US for its services. That fee, which is also what
Australians can expect to be charged, is on top of the cable TV
bill subscribers pay. The additional cost appears to be a reason
consumers are slow to convert. The corporation has accumulated
net losses of $741.8 million and its stock price (NASDAQ ticker
symbol “TIVO”) was down to $6.02 US per share on July
20.
But the use of digital video recorders is expected to boom as
the era of the VCR ends. According to the Carmel Group, a California
research firm, 56 million households in North America will own
a DVD by 2010, up from 16 million today. TiVo, being on the cutting
edge of that market, figures to see significant growth in the coming
years. It has partnerships with Amazon.com, DirecTV, Comcast and
Earthlink, and, in Australia, Seven Network.
With the advent of TiVo, Australians may no longer have to wait
to watch their favourite American shows, which can air ‘Down
Under’ more than a week after their network debut in the
U.S. In the Internet age, when details of TV shows hit blogs and
news sites not long after they air, the viewing experience for
Aussies and Kiwis is easily spoiled. For a fee, TiVo subscribers
in the UK can record episodes of programs like “Desperate
Housewives” and “Grey’s Anatomy” when they
debut in America. Soon, Australians will have the chance to enjoy
the same privilege.
“Broadband distribution of video has offered consumers control
to watch literally any television show, movie, or video on an on-demand,
a la carte basis. This is the true merger of unprecedented choice
along with ever increasing control,” Rogers said.
He also pointed out that TiVo’s biggest detractors - the
network television and advertising industries - are turning out
to be curious allies. TiVo offers second-by-second ratings on programming
and has also learned viewers aren’t skipping commercials
nearly as frequently as observers expected. That news is likely
to sit well with Australian advertisers, who form a $3.4-billion
industry and have understandably been worried about what TiVo’s
introduction will mean.
Rohan Lund, director of digital media for Seven Network, said
TiVo has the potential to be a boon to marketers rather than a
tool that undermines their efforts. "It is just a much more
powerful way of advertising, so, although you can fast-forward
the ads, when the ads are delivered they are much richer," he
said.
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