Tivo Podast: From Pay TV Threat to Teacher’s Pet— Lessons for OTT Video

It was shortly into my conversation with TiVo that it occurred to me that this pioneer of DVR has a lot to teach the burgeoning over-the-top video (OTT) industry.

Once upon a time, TiVo was feared as a Pay TV trouble-maker for not only allowing subscribers to pause and record live TV but also to (gasp!) skip television commercials altogether by forwarding through them. Now both subscribers and operators have widely embraced digital video recorder (DVR) technology, including TiVo’s own branded service licensed through operators like DirecTV (renewed their relationship after a multi-year hiatus) and Comcast (who also has their own private label DVR service). DVR is highlighted as one of those services that make TV “sticky” and compelling. After lawsuits and bad blood (which are still ongoing, but seem to be leaning in TiVo’s favor as demonstrated by their recent $208 million ruling against Dish Network Corp.), TiVo and its DVR offspring have emerged as more or less friendly cousins of their Pay TV kin. What’s more, they have continued to push the envelope by pioneering with their own OTT content and applications. The question is, how did they do it? How did they make the transition from Pay TV bad boy to teacher’s pet and what lessons are there for the evolving OTT video industry?

To answer some of these questions we caught up with Joe Weber, TiVo’s Senior Director of Technology, for our continuing IPTV/OTT podcast series. Click here for the full podcast player or use the mini-player in the right sidebar of this page.

TiVo = DVR + User Experience

From the beginning, TiVo understood that introducing a new feature people would want was always more than just adding new technology. It was about providing an intuitive and enjoyable user experience. I remember when TiVo first came out how my friends that had it loved to show it off. Invariably, they loved the sleek and helpful guide just as much as the ability to pause and record TV. Over time, the user experience and guide became synonymous with the TiVo brand, and a reason why some operators have licensed the TiVo service as a premium option to their own generic (some say boring) DVR services.

Among other things, in my chat with Joe we cover:
• How TiVo is trying to strike a balance between lean-forward content/applications and a relaxing TV viewing experience
• TiVo’s content search strategy for tracking user preferences and making recommendations
• How TiVo differentiates between a “walled garden” and a “walled experience” and what Joe thinks of TV Everywhere
• Upcoming major thrusts from TiVo (hint: they include an ongoing effort to blend OTT content with traditional TV as well as ways to improve blended search and discovery)

Pizza TV

Perhaps because it is in its DNA, or as a means to augment its core DVR business which has lost a quarter of its subscribers in the past two years, TiVo is a company driven to innovate. In the past year alone, Tivo’s impressive to-do list has many prominent checkmarks:

1) Launch TiVo HD XL box (terabyte of data)…. Check
2) Ink new content licensing relationships with YouTube, Disney, Amazon, Jaman, Netflix, and Blockbuster among others…. Check
3) Launch a mobile TiVo recording service…. Check
4) Introduce a new user data tracking service for operators to compete with Nielsen… Check
5) Upgrade TiVo Search capability to discover and recommend OTT videos related to traditional programming… Check
6) Step up business development efforts with new licensing or co-branding deals with partners ranging from cable operator RCN to electronics retailer Best Buy…. Check

TiVo has even partnered with Dominos to let you order a pizza through your TV. Now that’s innovation!

Don't Be Afraid

But not all TiVo innovations have enjoyed immediate user acceptance. While many advertisers were thrilled when TiVo introduced ads during pauses and forwarding, some subscribers grumbled and felt betrayed, saying they should not have to suffer through another layer of advertising for a paid service.

And in the Wild West world of OTT video, it remains to be seen how TiVo and its posse of partners will fair against the new gang of OTT outlaws and interlopers. But as Joe points out, for subscribers that already have TiVo, most of what they could possibly want from OTT will be served up in its user-friendly interface. But the question is, what role will any set-top box based walled garden play in an OTT world increasingly banging up against those walls? And for that matter, what need will there be in the future to DVR anything when most of it could be downloaded or streamed from the “Ultimate Video on Demand” service that OTT may become someday?

Lots of questions. And no doubt it will take some brave souls to find the answers. But you can bet Tivo will be in the mix with new solutions as the market evolves. Joe’s two lessons for the evolving OTT video industry:

“Innovate, but do it in a way where the existing players can get value from the innovation.”

“Don’t be afraid.”

Wise words from the company that forever changed the way we watch TV. Enjoy the podcast.

Please contact me about IPTV or OTT Video consulting opportunities including custom research, speaking, webinars, white papers, or product strategy: bmahony@trenderresearch.com.