How to save TiVo.

In 1997, a few folks had a brilliant idea, and they called it TiVo. These folks put together a business plan, and here we are today. TiVo, with its digital video recorder devices, has changed the way as many as three million people watch their televisions. Aforementioned business plan certainly did the trick in getting investors excited along the way, but, today, TiVo is losing about $80 million a year, which is being tacked on to its already sky high $660 million in debt.

What went wrong? TiVo’s brilliant idea was one half of a great recipe. Unfortunately, the business plan that should have served as the other half of the company’s foundation hasn’t turned out to be nearly as sturdy. The basic concept was sound: build the company around a revenue channel fueled not solely dependent on the hardware itself. But, instead of thinking outside the box, TiVo focused on the fairly mundane idea of subscription revenues from customers.

Humdrum business strategy can often work. But TiVo’s brilliant idea has been severely hampered by its less-than-brilliant business plan. TiVo’s timidity in the entertainment industry has hindered its ability to deliver a truly solid, innovative product. Worse yet, TiVo lost out on potentially sustaining revenue by ignoring or fumbling partnerships with cable and satellite television providers.

Although the picture for TiVo as a solvent, independent company is bleak, nobody should give up yet. As Research In Motion has proven, an end-user platform can succeed even in a market dominated by stodgy bullies who have little imagination for innovation. TiVo could learn a lot from the little device called BlackBerry.

The concept of TiVo being only a set-top box is the first belief that has to be tossed out the window. TiVo has got to embrace the concept that its brilliant idea can’t stand on its own in the industry, today. Building a content serving platform, enabled in the living room by TiVo, is the company’s best hope for survival. By basing this platform on MPEG-4, TiVo could quickly deliver an efficient, end-to-end video-over-IP (or IPTV) solution for providers like Qwest, SBC, BellSouth, Bell Canada, Telus, and Allstream. TiVo’s engineering expertise, along with the help of a few partners like Apple and Motorola, could well ensure sustained revenues and profits.

TiVo’s original concept was bold, but since then it has moved forward hesitantly. Taking on the very companies it has built its business around would require bravery, passion, and determination. I think TiVo has it. I just hope they realise it, before it’s too late.