CNet.com has a piece up on its website that talks about how networking equipment giant Cisco Systems might be looking to acquire TiVo, the digital-video recording pioneer. The article, which is labelled “news analysis” — which in the journalism business is code for “speculation” — starts off with Cisco’s recently announced $6.9-billion acquisition of Scientific-Atlanta, one of the largest makers of set-top boxes in the world next to Motorola, and then asks the question “Who’s next?”
One response might be “Why should anyone be next?” The purchase of SA is one of the largest acquisitions Cisco has ever done. The idea that it’s going to rush out and buy something else right away is more than a little wacky. But a better response might be “Why TiVo?” As much as everyone seems to want to see TiVo get snapped up by either Yahoo, Google or Microsoft, I’m not sure that’s as likely as TiVo fans might want it to be — and I think a purchase by Cisco is probably even less likely (The Stalwart isn’t convinced either).
Why? Because — as Rafat Ali also points out at PaidContent.org — TiVo doesn’t really bring anything to the table that Cisco doesn’t already have with Scientific-Atlanta. Yes, it’s true that TiVo (and Replay TV) pioneered the DVR business, and the company has a small legion of devoted fans who love the extra features it provides. But when it gets right down to it, DVRs are a commodity, SA already makes them — including ones that do high-definition, and have interactive features for integration with the Internet (or the ability to add them) — and so there is little or no reason to pay the $500-million or whatever it would take to buy TiVo. For what it’s worth, I think the idea of Cisco buying Nintendo makes even less sense, but maybe that’s just me.
Personal video recorder company TiVo Inc. said Monday that it plans to roll out a new feature that will allow users to choose certain commercials, based on keywords, and then have them inserted into TV shows that they have recorded with their TiVo (Dave Zatz has a description of how this would work, taken from a patent application by TiVo).
That might sound a little odd considering one of the main benefits of having a TiVo is that you can fast-forward through the commercials, but it’s obvious that the PVR company is trying to find new revenue sources and is willing to consider just about anything. This new feature sounds a lot like an attempt to create a kind of Google AdWords model, but with TV instead of the Internet.
Is that even possible? Carl Howe, a former Forrester Research consultant, says he thinks it is “a brilliant idea,” — the Googlization of TiVo, he calls it (he goes even further to say that he sees Google buying TiVo because of the information it will be able to collect based on its new advertising model). Others disagree.
Om Malik, for example, notes that paying users of TiVo — who are already paying for something that others can get for virtually nothing through the PVR offered by their cable company — might be less than enamoured with the new service. AdWords works for Google because its main service is not only free, but is so useful that people don’t mind having ads served to them, not to mention the fact that the act of searching is more closely aligned with targeted ads than, say, the act of watching CSI:Miami.
Stephen Baker of BusinessWeek is also skeptical, as is Cynthia Brumfield from IPDemocracy. And I would have to say I am too — TiVo’s move seems more like a Hail Mary pass by a struggling company than anything else.
Here’s a column I posted at globeandmail.com about rumours that Yahoo might acquire TiVo:
“In what was no doubt a welcome ray of sunshine for shareholders of TiVo, the maker of personal video recorders announced a deal with Internet portal and search engine company Yahoo, which will allow TiVo owners to click a TV listing on Yahoo’s pages and automatically record shows on their PVR. This gave a small boost to TiVo’s somewhat beleaguered shares, but unfortunately the warm glow of the deal didn’t last for very long — the shares lost ground on Tuesday, the day after the announcement, and are still down by more than 50 per cent from their peak early last year.
Not surprisingly, the deal with Yahoo renewed the speculation that TiVo might be an acquisition target — if not for Yahoo then for Google, or Microsoft, or AOL, or maybe your Aunt Phyllis (that last one is just a joke). It might be stretching things a little to say that behind every TiVo takeover rumour there stands a disgruntled shareholder, but at this point an acquisition of the company seems to be about the only thing that might breathe some life into the share price. Although it more or less invented the PVR market, TiVo hasn’t been able to capitalize on that Ã¢â‚¬Å“first-mover” advantage, and so has been forced to watch the world pass it by.
So Yahoo and TiVo announced a deal in which users of TiVo (why is the “v” capitalized? just wondering) will be able — under certain circumstances — to click a listing at Yahoo’s television-listing portal and have their TiVo record a show (if you’re Canadian, or any non-U.S. resident for that matter, don’t plan on having this ability until you are old and grey, unless you are already old and grey, in which case you will have to wait until you are dead). They will also reportedly have the ability to view Yahoo Photos on their TV and to see traffic reports, news and other services as well.
My colleague from the National Post, Mark Evans, theorizes that this might be the precursor to a Yahoo acquisition of TiVo (and Russell Shaw at ZDNet thinks so too, apparently), but I have to say that I don’t really see the logic. It’s obvious why TiVo might be interested, since the company has been struggling on its own, especially since its major partner DirecTV cut the PVR-maker loose and decided to see other people (the new services won’t work on DirecTV TiVos). And I can see why Yahoo might want to find more eyeballs for their content — but that doesn’t mean it has to buy the whole company. TiVo is losing market share to regular cable boxes with PVR functionality, and it’s not clear that aligning itself with Yahoo would change the situation dramatically.
Om seems skeptical as well, and notes that this feature has been available to AOL users for almost two years, something also noted by Good Morning Silicon Valley and Real Tech News.