[opendtv] news: Apple Deal Would Be Rotten for TiVo

The deal may be good for Apple, enhancing the mini enabling the much
anticipated and talked-of new video and multimedia service, but according to
Phillip it's not so good for Tivo.

Donald

Apple Deal Would Be Rotten for TiVo
http://www.tvpredictions.com/appletivo022405.html

The DVR service needs a new owner who can
generate subs quickly. And that's not Apple. By
Phillip Swann

Washington, D.C. (Feb. 24) -- TiVo's stock has
jumped approximately 20 percent over the last two
days on rumors that Apple Computer will buy the
Digital Video Recording service.

By late Thursday, however, the rumors appeared to
be fading, which is good news for TiVo fans.
Apple is one of the last companies that TiVo
should consider as a prospective owner.

Yes, TiVo is in trouble -- and it needs a new
owner to survive for the long term, in my humble
opinion. The company's partnership with satcaster
DIRECTV is shaky and cable operators are
reporting that more subscribers are signing up
for non-TiVo DVR services. TiVo could soon find
that it doesn't have a way to generate new
subscribers, except at retail, which is both
costly and uncertain.

Consequently, TiVo would be wise to sell the
company to a cable or satellite operator
(DIRECTV, Comcast, Time Warner), which could
offer its recording service to their subscribers
indefinitely. (Editor's note: Despite the rumors,
TiVo CEO Mike Ramsay has denied the company is
for sale.)

But Apple, whose core business is personal
computers and portable music players (the iPod),
could not deliver one cable and/or satellite
subscriber, at least not immediately and perhaps
never. Over the years, Apple has developed few,
if any, relationships with TV-based companies.
With Apple as its owner, TiVo would not be any
better off than it is today. In fact, it would
probably be in worse condition because it would
have to go through some transition pains from the
sale.

(One note: TiVo would certainly benefit from the
savvy and stability of Apple CEO Steve Jobs.
TiVo's management is in chaos with the
resignation of company president Marty Yudkovitz
and the expected resignation of CEO Ramsay;
Ramsay will stay on as chairman, he says. Despite
his inexperience with the TV business, Jobs is a
quick study.)

Some uninformed analysts have suggested over the
last few days that Apple should make the deal
because it could offer TiVo's recording/video
service to its iPod customers. Yes, it could, but
how many would subscribe? Portable video is a
risky proposition at best. While Americans love
to listen to music on the go, few may be
interested in watching videos on small screens
while attempting to walk down the street or
perform some other daily task.

If Apple wants TiVo for the iPod, it should save its money.

Other analysts have suggested that Apple could
use TiVo on its new mini-Mac, which could be used
as an entertainment hub in the living room. The
thinking is that viewers would record shows on
their mini-Macs and transfer them to their TVs
when they want to watch them.

However, the concept of the PC as a media center
has failed before and it will fail again. Most
Americans are not ready -- and may never be ready
-- to use their personal computers in the living
room, no matter how small they may be. People
want television to be simple, not more
complicated.

And that's why TiVo, a TV recording device, needs
to partner with a TV company, not a PC company.

Phillip Swann, president of TVPredictions.com,
has been quoted on TV technology in dozens of
publications and by broadcast outlets, such as
The Chicago Tribune, The Hollywood Reporter, Fox
News and CNN. If you would like to contact Mr.
Swann, he can be reached at 703-505-3064 or at
swann@xxxxxxxxxxxxxxxxx



 
 
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