TiVo recently announced a video download service that will enable third-party video to be downloaded directly to a TiVo unit via their broadband Internet connection (well, not directly, but close enough). Most people have been focused on the “TiVoflix” potential of this development, but the potential is so much greater than a slow release of independent DVD titles via TiVo’s device. This service is a clear indication of what is possible with a hybrid approach to video delivery and the primary reason why TiVo could still generate enormous earnings (if they can continue to focus on important development efforts like this).
The reality today is that we as consumers are witnessing the relatively rapid birth of Internet TV. But this birth is merely a logical progression of video content delivery from a closed network to an open network. The problem with this transition is that the speed is hampered by lots of things, ranging from copyright concerns, to profitability in existing distribution channels, to consumer habits, to network topology and bandwidth constraints. None of these issues will prevent video from making the complete leap from cable/satellite/DVD delivery to Internet delivery, but they will all play a significant role in the pace of this transition.
So, how do we get from here to there? Most approaches appear to just abandon existing distribution and focus on Internet delivery only. The problem is that a majority of the video content that people want to watch is still being delivered through the old network. You go to your TV to watch “The Sopranos” and your computer to watch “Rocketboom.” This is fine, but there is no reason why these two experiences cannot be more closely integrated. I would still prefer to go to one place and watch both types of video. This is what TiVo’s download service enables. TiVo provides a necessary hardware bridge between the old method of content delivery and the new.
This is also one of the reasons why I have been screaming that TiVo’s relationship with Comcast is actually such a negative move. Comcast has a vested interest in delaying the transition to Internet video delivery as long as possible. They make much more money delivering this video via cable than via cable Internet (not to mention vastly superior negotiating power with content owners). But a successful transition to Internet video delivery would make TiVo a much more valuable stop in the video distribution supply chain (potentially even more powerful than Comcast). TiVo could start to resemble Apple more than some tiny licensor of technology. Comcast is not going to want to see this happen.
I’ll talk a bit more about the implications to TiVo’s business model in a future post (and the role CozmoTV plays in this model). But I will say that the advent of devices that provide both cable/satellite and Internet video access are very powerful platforms that will speed the revolution that is Internet TV. These advancements will never emanate from Motorola, Scientific Atlanta, or Dish specifically because these technologies erode the power of their customers. So keep cheering for TiVo to survive lest we be stuck with Microsoft as our only option for integrated cable/satellite and internet video. We’ve seen how that movie ends…