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Wednesday, June 27, 2007

Why Isn't TiVo/Unbox Taking Off?

I had lunch in San Francisco yesterday with Macrovision CEO Fred Amoroso and the company's chief evangelist, Richard Bullwinkle.

As is often the case with these lunches, the best discussion happens after the dishes have been cleared, after my lunch companions have gotten their marketing messages out, and after the coffee has arrived. I asked Richard, who used to be TiVo's chief evangelist, why the combination of TiVo and Amazon's Unbox didn't seem to be taking off.

Essentially, months before Apple started selling AppleTV, Amazon and TiVo got together to make it possible for users of Amazon's Unbox download service to have movies sent directly to their TiVo boxes. All you need is a TiVo Series 2 or 3 device, connected to your high-speed home network. Unlike AppleTV, you don't need to buy a new dedicated device to bring Internet content to the TV.

Problem #1, according to Richard, is that 20 percent or fewer of TiVo's users have connected their box to a broadband connection. That's strange, he said, because running the phone banks that TiVo boxes dial into to get program information and advertising is one of the company's biggest operating costs. Why isn't there an incentive that TiVo offers -- maybe a free wireless adapter, or one month of free service? -- to get people to conect their TiVos to a broadband network?

Second, while both companies are promoting the offering on their Web site, there hasn't been any high-profile promotion beyond that. Contrast that with Apple's hype and advertising around AppleTV.

Third (and this was my contribution to the coffee talk), you'd think the studios would want to work with -- and possibly co-promote -- Unbox, just so that Apple/iTunes doesn't wind up as the only game in town for movie downloading. They need multiple marketplaces, each with the ability to connect with the TV set.

Your take?

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  • The DRM, limited selection and interface are not particularly attractive to users. Unbox and most similar services are designed with the studios as customers. These services will fail because the only customer they should care about is the viewer.


    By Blogger Unknown, at 1:24 AM  

  • I think that the 20% number is a little misleading because DirecTV won't give their customers an option of plugging in. If you look at the stand alone audience, I believe that the percentage of boxes connected are closer to 50 - 60%.

    As a TiVo customer, it's hard to justify paying for movies when I'm already spending 50 bucks a month on a cable bill. If they offered more archive TV shows on demand, I might be interested, but at $2 - $4 per show, the pricing isn't really all that attractive, when I can get free movies with ads or "all you can eat" rentals from Netflix.

    What I like about how Tivo has implemented the program, is that they've remained content neutral. A lot of people think TiVo should be charging Amazon a fee for each download, but I'd rather TiVo charge their monthly fee to let me connect to any video content. There aren't a lot of solutions that can handle HDTV, over the air signals, digital or analog cable feeds and non-DRM internet content.

    It's easy to look at Amazon as a failure, but from the perspective of the customer, it's a great addition, if you interested in spending the money. If I wanted to go to an OTA signal and use my $50 a month to buy 25 films, I've got that option. Instead of TiVo having a financial interest in promoting one content delivery system over another, they instead try to organize all television and let their customers take advantage of the features that they are interested in.

    By Blogger Davis Freeberg, at 12:07 PM  

  • I think the reason why Unbox hasn't taken off is the price. The regular rental price of $3.99 is too much. However, the occasional sale price of 99 cents is very attractive.

    By Blogger Jimbo, at 9:06 PM  

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