Advertisement

TiVo finally tells TV broadcasters to stuff it

TiVo finally tells TV broadcasters to stuff it
TiVo's new Bolt: Will it leave broadcasters bent out of shape? (TiVo)

Almost from its inception, TiVo, the San Jose company whose device has given the generic name to digital video recorders, has had an uneasy relationship with the broadcasting industry. But with the release last week of a new model of TiVo recorder dubbed the Bolt, the firm is encouraging customers to "give commercials the finger," in its indelicate words. This is a big change from the past.

A quick look at the history of TiVo. By allowing viewers to fast-forward through commercials (not to mention the dull stretches of TV programs), devices like TiVo's threatened the very principle of advertising-supported TV.

Advertisement

TiVo and its original competitor, ReplayTV--both introduced their products in 1999--took different approaches to this option. Through a button on the Replay remote, you could skip commercials entirely, 30 seconds at a time. Broadcasters hated that. TiVo took a kinder, gentler approach: You could fast-forward, but not skip. That meant that you would still be exposed to the commercials, albeit at turbo-speed. That mollified broadcasters and advertisers somewhat, and it fed into the company's strategy of reaching lucrative cooperative agreements with the networks.

It was a combination of accepting reality (fast-forward was a functionality that TiVo buyers demanded) and leaving broadcasters with at least a crumb of outreach to viewers. It may not have detracted much from the DVR experience, which was as compelling as a thunderclap.

I've written before that during all the years when high-tech entrepreneurs would march through The Times offices showing off their innovative products, only once did I ever see one that made me think, "This will change my life." It was the ReplayTV box, and its potential for completely changing the TV viewing experience was instantly apparent.

TiVo's strategy of cozying up to broadcasters, which included offering promotional space on the TiVo box to be pushed at users, enabled the firm to outlast ReplayTV, which finally disappeared after several ownership changes. But it hasn't yielded consistent profitability--TiVo didn't report its first annual profit until 2009, and it has lost money in six of its last 10 fiscal years.

So here comes the Bolt. The serpentine-shaped unit, which will sell for up to $400 with a one-year programming subscription included, offers two new features. One is Skip Mode, a return to the ReplayTV past, which allows users to skip entire commercial breaks at the press of a button. The other is Quick Mode, which allows playback of recorded shows 30% faster, with the audio electronically tweaked so the actors don't all sound like quacking ducks. (Broadcasters might not care about that, though content producers might hate it.)

Skip Mode is an acknowledgment that the heyday of interpolated broadcast TV commercials is over. It's also a sign of TiVo's new strategy, which is to appeal to cord-cutting viewers who get more of their video from subscription sources without commercials, such as Netflix, HBO Now and Amazon Prime. Even so, Skip Mode will be activated only for shows on the most popular 20 networks or so, and for shows airing between 4 p.m. and midnight.

The Bolt itself is an acknowledgment that TiVo's overall business model--selling full-featured DVRs for up to $600 and charging annual subscription fees of $150--is tapped out. Subscriptions are stagnating, and the set-top boxes rented to customers by cable and satellite systems typically incorporate their own DVRs.

TiVo added 150,000 subscriptions last year, its chief marketing officer, Ira Bahr, told an online forum of loyal TiVo customers last week. "There just aren't enough of you to sustain the company's retail business alone," he said. "Compare that to the millions of streamers out there, and the tens of millions of DVRs out there, and you see that we've got a lot of ground to make up."

Whether TiVo will survive the continued evolution of TV is anyone's guess. It was successful at upending the business model of broadcasting and cable, but it hasn't been the victor in the free-for-all that followed. It's still fighting for its life--if it can't expand its market, Bahr said, "we're not going to be able to do much of anything."

As streaming video takes over, the DVR record-at-home model may vanish, too; the box streaming your Netflix or Amazon Prime choices has no moving parts to break down, and of course no commercials to skip.

Keep up to date with the Economy Hub. Follow @hiltzikm on Twitter, see our Facebook page, or email michael.hiltzik@latimes.com.

Advertisement
Advertisement