TiVo (TIVO) might be struggling, but that’s not stopping CEO Tom Rogers from pitching the company as a saviour for network TV.
In a letter to the company’s shareholders, Rogers warns that the future for network and cable TV is going to look a lot like the present for newspapers and local broadcasters. How so? Because advertisers will flee as more users get DVRs, skip through commercials, and look outside of the traditional channels to get video entertainment — like Hulu.
TiVo, of course, is here to help, with new set-top-based ad models and analytics that will allow the networks to survive in this ad-skipping world. This is all part of Rogers’ future-pitch for the company, which is important for TiVo because the present doesn’t look so good.
How does TiVo survive? By positioning itself as a hub for streaming video from all sources to the television set. On that front, he’s got quite a bit of competition both in the market and on the way. How does Rogers see the future playing out (in a good way) for TiVo? The highlights:
- DVR penetration is growing and “TiVo is the only brand name in this space.”
- Broadband connected TVs will bring near-infinite choice, but also the need for technology to organise and search for it.
- The transition to high-def TV signals next year means people are upgrading their TVs and more likely to adopt new services, such as TiVo.
- Sure, there are plenty of boxes coming to the market, but most are limited (weak movie selections, tethered to iTunes, etc.) and we think we can do it better.
- Viewers are going to skip ads, and the networks need to get used to it. Good thing we’ve got research data and analytics to make ad targeting possible, and preserve the lifeblood of TV.
Sound like a long shot? It is. But Rogers is smart enough to know what TiVo should shoot for. That is, if he can’t engineer an exit through a sale to Comcast (CMCSA), which is using TiVo software for premium DVRs in certain markets.
But TiVo investors by definition believe in Rogers’ vision, and his ability to pull it off. Otherwise, TiVo is a premium DVR maker whose business was overrun by cheaper no-name models handed out by cable operators. And who would want to invest in that?