First Mover Disadvantage
Forbes Online has an article this morning that discusses TiVo and the slower than expected adoption rate of the device given all of the praise:
"That's really remarkable," says Adi Kishore, a media and entertainment analyst for the Yankee Group in Boston. "I can't think of any product that has had the satisfaction levels it has had but has been as sluggish in terms of the growth of the market. It's certainly unusual for a product to have this kind of enthusiasm from the community that's using it without being able to tip over and really become a mass-market phenomenon."Currently, TiVo, which hit the market more than four years ago, serves fewer than 800,000 subscribers. Only about 1% of America's households employ TiVo or similar digital video-recording products, according to the Consumer Electronic Association. By comparison, market penetration for DVD players has hit 41% and is rising, making it one of the most rapidly embraced products in history.
The article goes on to argue that TiVo suffers from a first mover disadvantage: it's a product that will create a market but only appeal to early adopters who will quickly churn out to the next greatest thing. There is no doubt that TiVo has had to create this market itself and suffers from the same arrows in the back that have taken many pioneers down.
But to me, TiVo suffers from another great entrepreneurial problem -- it's a feature, not a product. I have the bundled DirecTV/TiVo and it works beautifully. Rather than purchase a normal satellite receiver, I got one with TiVo inside. No integration issues, no separate device. TiVo is great functionality, but it needs to be built into TVs, DVD players, cable and satellite receivers. It's too hard a value proposition to explain and too complicated a device to set up on its own.
Categories
Consumer Electronics & Gadgets3 TrackBacks
Listed below are links to blogs that reference this entry: First Mover Disadvantage.
TrackBack URL for this entry: http://ventureblog.com/cgi-bin/mt/mt-tb.cgi/134
Forbes Online has an article this morning that discusses TiVo and the slower than expected adoption rate of the device given all of the praise: "That's really remarkable," says Adi Kishore, a media and entertainment analyst for the Yankee Group in Bost... Read More
Andrew Anker at VentureBlog points to this Forbes article on TiVo that talks about why it is not gaining the popularity it deserves. Is it suffering from the First Mover's Disadvantage? According to Andrew, TiVo is more a feature than a product, and as... Read More
Andrew Anker ponders Tivo's first-mover disadvantage. "Tivo suffers from a great entrepreneurial problem - it's a feature, not a product." I don't know about that. Almost any product can be a feature of a more complicated product.... Read More
While some companies, namely Apple, inextricably link their hardware and software, I strongly agree that Tivo is less a device and more of a service. Palm is one example of a company realizing a value is achieved by licensing their OS and then recently spinning it off altogether from the hardware. Tivo should focus more on the service they provide by marketing "Tivo Inside" to hardware manufacturers, the same way that Blackberry should market their "always on" email feature to PDA and cell phone manufacturers.
While I am an enormous fan of Tivo, I would still like to be able to use the service on a computer that I build myself. Just as I'm sure many Mac fans would like a bit more control over their hardware as well.
In contrast to Marc, I'd like to buy the hardware without having to subscribe to the service.
another simple stupid reason why the tivo feature really wants to be integrated with other boxes -- there is no place on my a/v receiver to plug in a "tivo". i have inputs for cd, dvd, dss, etc. nothing for "tivo" or "pvr". in part because of this, i bought the combined directivo box.
By rights I should own a TiVo. I'm the nearly perfect demographic for it, all my friends love theirs, and gosh, I'd like to watch what I actually want to watch on TV. So why haven't I gotten one?
Because the TiVo is about optimizing something I basically wish I didn't do at all; watch TV. Why would I pay a monthly service to watch more TV? It's like buying a device to inject heroin into my bloodstream faster and more effectively than i otherwise could, or allowing me to spend more time smoking and really enjoying every inhale.
I'm being hyperbolic above, but most people have a very convoluted relationship with television. Partly because people want to watch, and yet really do feel addicted to it (off-topic, I've read that opiates that wear off quickly are the most addictive; TV turns off with a "click"). And partly because it's part of the folklore that people always watch more TV once they get a TiVo.
I think this love-hate relationship with television is what's preventing people from embracing TiVo more quickly.
mahlen
There is no fruit which is not bitter before it is ripe.
--Publius Syrus (1st century B.C.)
Mass market devices have to be really cheap. What devices quickly moved to mass market when they are priced at $300 + $10/mo? Answer almost none.
Good example - cell phones are priced at a fraction of their cost - e.g. "free cell phone" - to get adoption of the service fees.
Tivo's problem is the same as Apples. They make both the software and hardware and it's proprietary.
They should be more like Microsoft than Apple.
The thing with tivo is that everyone is seeking the one reason for its lack of mass adoption. The reason is many, as many posters have already commented. THe reasons are price (mass consumer electronics must be less than $300), HW and SW and service combination divide the potential user base, propriatary nature, the last one as i see it no clear lock on the market. I went to Fry's this weekend and there must have been 30 different types of Software/HW PVR's for sale. The costs ranged from 49-349. So i imagine the sweet spot is 150 with no service fee's. Allthough i do not see the do it yourself kit replacing the TIvo, it does fracture the market enough to cause Tivo fits. I do beleive a better concept will be introduced and Tivo unless very agile and aggressive will find itself labeled as a market developer that is crushed from their legacy...
It's a common misconception that people watch more TV with Tivo. The reality is you watch about the same amount of TV but you have a much better experience.
In the short run, you do watch more TV because you realize that there is sometimes great stuff on at 5AM or 2PM and you're just not around to see it. In the long run, you become more efficient with your viewing habits and you watch ONLY what you really want to watch. And you never miss an important part, and you can go to the bathroom in the middle of a scene, and you NEVER watch commercials. Which is why the advertisers wish Tivo had never been born.
I think one thing that Tivo-and the rest of the PVR industry has wrong is its main value proposition. "Pause Live TV" is not the PVR's main value and will simply not inspire people to part with $300 plus $10/month. I believe the real value is the QUALITY of tv watched on YOUR own schedule. I almost NEVER watch live tv anymore. Imagine if you were beseiged by countless hot [insert gender preference here] who want to date you. Would you start dating every night in order to clear the queue? Maybe at first. But eventually, your standards will go way up and you date only a fraction of those you find the most attractive. This has been my experience with Tivo. I watch less tv now because my standards for investing 1/2 hour of my time have gone up. I'll even dump an episode of my favorite show mid-stream if it just isn't measuring up. Why? Because I can. There will be more shows to replace it the next time I elect to sit down for a show.
Sky in the UK are switching from the 'pause live tv' angle to the 'make your own channel' angle - which I think has better chances of success.
The other problem I see with all of these types of boxes (which my friends think is fantastic, but don't actually own) is the limitations. If you could back up shows onto DVD/CD then I think it might have a better impact, but the copyright rules are too stringent, which is unfortunate.
That said, when my tivo finally gives up (it's on it's way out), I'm going to replace it with a mythtv box. (build a dirt cheap PC running Linux and bingo, expandable PVR).