Faultline: TiVo plots move to tablets and PCs as European momentum grows Jul 26, 2012 – Rethink Research
TiVo’s campaign to become the leading hybrid DVR maker first in Europe and then the world received a symbolic boost with the news this month that the number of subscribers with its box at UK MSO Virgin Media has passed the million just 18 months after the launch in December 2010. This means over 25% of the operator’s 3.84 million pay TV base now have the box, with Virgin Media and TiVo now plotting how to maintain the current rate of growth of almost 90,000 subs a month by hooking remaining customers. The increase in subs growth rate has tailed off but we see every reason to expect that Virgin Media will maintain the present level for another year to reach 2 million by mid-2013.
The news at TiVo’s second European customer for its hybrid DVR, Spanish cable operator Ono, is less promising, but that is largely because of the state of the country’s economy. Ono began rolling out its TiVo platform in October 2011 and by the end of the year had 8,000 customers on board in Barcelona and Madrid.
There were then high hopes that Ono would repeat the Virgin Media experience with the TiVo box ripping through the operator’s 923,000 pay TV customer base, but selling the box has been an uphill struggle, with only 16,000 customers by June 2012. This prompted Ono to launch a desperate marketing campaign called ‘I love TiVo’ to boost subscriptions, offering discounts of €40 to subscribers who secure a new TiVo client for Ono, and an additional €10 off the Family and Friends package if the new client is not already receiving Ono services.
These first two customers are both MSOs, but the TiVo box is equally suited to satellite and IPTV services, with a number of other European contenders in all three camps. In June 2012 TiVo gained its third European customer, and arguably first for IPTV, Com Hem of Sweden. Com Hem is Sweden’s largest cable TV operator with around 650,000 customers, but says that its TiVo service for launch early in 2013 will include access over IPTV set-top boxes, as well as PCs and wireless devices such as tablets. We have to say this mention of IPTV is a bit confusing, since at present the company uses tuners, whether they are tuning between cable QAM channels or for VoD to an IP based DOCSIS set of channels, and as far as we can see no genuine IPTV is involved. Perhaps they just mean that a TV Everywhere system over broadband and WiFi to tablets is part of the set-up.
Planned features for the Com Hem TiVo service include a one stop shop, through which consumers will be able to access all available content from various devices, and also universal search embracing linear TV, VoD, pay-per-view, and web-based OTT services. There will also be TiVo Everywhere, allowing users to access their content on mobile devices including tablets and smartphones, whether the content is sourced from the Com Hem cloud or their set-top box.
This last feature, combining place shifting with OTT, represents TiVo’s strategy for competing with other hybrid boxes, such as Liberty Global’s Horizon, various emerging HbbTV products, and in the UK the recently launched YouView. It is worth noting in passing that Virgin Media’s CEO Neil Berkett felt compelled to respond to the YouView launch by highlighting the superior search and recommendation features of the TiVo box, at least his company’s version.
But to set the context for TiVo’s impending expansion beyond the DVR into PCs, tablets and smart phones, it is worth glimpsing at its history. It was TiVo that pioneered the DVR and trick-play functions over a decade ago. But TiVo eventually ran out of steam, until reinventing itself as a vendor of hybrid software for integrating broadband and broadcast services in 2008. Crucially this meant it was no longer confined to its own boxes but could enter partnerships with set-top box vendors as well as pay TV operators. It has done both of these for Virgin Media, having jointly developed the search and recommendation software with the operator, while the boxes were made first by Cisco and then Samsung.
TiVo initially peaked in 2006 at 4.4 million customers, and then declined for five years before bottoming out early in 2011 at around 2 million, and then bouncing back to stand at 2.28 million by the end of its fiscal year on 31 January 2012. This second coming was entirely down to its partnership with Virgin Media, struck in November 2009. TiVo developed the hybrid TV and broadband interactive interface, as well as the middleware, for Virgin Media's new premium set top box co-branded by both companies.
TiVo is now actively pursuing other big European targets in both cable and satellite, with its strategy being to persuade operators they need it to compete with Liberty Global’s Horizon box driven by NDS software in countries where it is present, which includes Germany, Switzerland, the Netherlands, Ireland, Austria and the Czech Republic. Obvious candidates then are MSO Ziggo in the Netherlands to compete with Liberty Global’s UPC there. In Germany Kabel Deutschland might be interested in TiVo to help compete with Unity Media and Kabel BW, both Liberty Global subsidiaries – similarly Kabel Signal and Saltsburg Kabel in Austria, Voo in Belgium, or Digital Cable Group in Switzerland.
Equally the likes of Numericable in France, TDC or Stofa in Denmark, DNA in Finland, or Telenor in Norway, could be interested in TiVo to seize first mover advantage in those countries, where Liberty Global does not have an operation at present. All realistic potential candidates together have almost 20 million subscribers for TiVo to aim at, with the chance of becoming a serious rival to Liberty Global.
Where these operators are fighting Liberty Global, the need to move to a search and recommendation interface and to offer multiscreen will make TiVo one of the only games in town on cable. In other, non-Liberty, markets this could lead to a surge in subscribers, as it has at Virgin. On this count TiVo’s recent moves are significant. One idea is to make the TiVo software available on commodity boxes including PCs and tablets, which would achieve two things. It would enable operators to standardize on TiVo as a TV Everywhere platform reaching multiscreen devices over the Internet, and it would also offer the option of a slimmed down low cost entry box. Virgin Media is currently examining that second option, with mutterings of “TiVo Lite” as a way of persuading lower net worth customers to take the box. Virgin Media wants to convert its entire pay TV customer base to TiVo over the next few years, and CEO Berkett was recently talking about exploring low cost devices not made by Cisco or Samsung to deliver TiVo to non DVR boxes.
TiVo is also hoping to score by helping operators attract advertising to hybrid platforms through intelligent measurement. On this front TiVo this month announced acquisition of TRA, an advertising software company, whose platform includes a database that links information from households about what people are watching with what they buy. TiVo said the acquisition will give it insights that will offer the TV advertising industry Internet level measurement and accountability in the television analytics business. The unit will be known as TiVo Research and Analytics (TRA).
Faultline: TiVo plots move to tablets and PCs as European momentum grows
