Margin Note: Time for the MacinTiVo
Margin Note: Time for the MacinTiVo
From Friday, May 16th
by TechTracker CEO Ralph Risch
In February I posted my iPod wish list, and in typical fashion Apple delivered none of the features I requested and still re-established the iPod as a "must-have". Changes to the device itself amounted to little more than smoothing of rough edges (and rounding of sharp corners). However, iTunes 4 and the Apple Music store have not only made the iPod more valuable, they have positioned Apple as the solution to emulate for digital music distribution. For now Mac users should be contented, and will probably wait until next year to resubmit their iPod feature requests.
Which enables us to focus on the next logical spoke of Apple's Digital Hub: television. Business 2.0 suggested recently that Apple should buy TiVo, based on the fact that both are user-focused technology companies with "boutique" products, and the challenges facing Tivo. I agree with their conclusion, but for a more fundamental reason: for most users, the TV will be the most important device connected to their Digital Hub.
Your "Digital Life" includes TV Apple's iLife apps cover 4 spokes of the Digital Hub: photos, music, video cameras, and DVDs. Apple iSync connects in cell phones and Palm OS PDAs. But nowhere does the digital hub strategy mention television, which will soon be the most common digital device in the modern household.
There are plenty of TV-connected gaming and Digital Video Recorder (DVR) consoles. There are also numerous examples of "TV-in-a-computer" solutions, most of which have failed miserably since most TV watching takes place on the sofa. Microsoft has now entered the latter category with the "My TV" component of Windows XP Media Center Edition.
What has not been done until recently is to connect the computer to the DVR device. TiVo now uses Rendezvous to source music and photos from Macs to play on your stereo or your TV. TiVo also enables remote scheduling via a web browser, recognizing that your computer is inherently a better place to research shows and schedule recording than a TV. (The next logical step is to integrate your TV schedule with your computer-based calendar.)
Computer users should also have access to video captured by the DVR. Apple has worked hard to establish the Mac as the premier video authoring device. iMovie and Final Cut users would love to repurpose TV shows (according to "fair use" laws, of course). Better yet, imagine plugging an iPod into your MacinTiVo to sync up small-screen format versions of your favorite shows to watch on the road. (So much for holding back iPod feature requests.)
Jumping in with both TiVo feet If Apple wants to enter the interactive TV market this late in the game, they need to come prepared. The TiVo brand has become the Kleenex of the DVR market, and its users rave over the technology. (FCC Chairman Michael Powell got one for Christmas, and called it "God's Machine".) TiVo is also Unix-based, so the technology teams should integrate well. More importantly, TiVo owns several key patents covering the system's operation, including one for their "multimedia time warping system."
Nonetheless, TiVo is a high risk business, and an attractive acquisition target for a company that can face those risks. TiVo's challenges include similar play-on-demand systems from cable companies like Comcast and TimeWarner. But cable-based systems are based in the cable company's servers and not in the TV console. This gives cable companies extra control (for example, to build in "non-skippable advertising"), but it also gives the users less flexibility.
TiVo's very existence is also threatened by mounting losses. Luckily, Apple is adept at cutting costs and also well-positioned to expand the TiVo audience. How many Apple customers would shell out $499 for a Macintosh-connected TV device with a lifetime subscription? Based on the success of the iPod, it is likely Apple could double TiVo's subscriber base of 625,000 in 12-18 months.
Giving the controls to the users The bigger picture here is that nobody has effectively connected a TV to the Internet, and Apple could provide a platform to do so. The opportunities for third parties (or Apple itself) are tremendous. For example, imagine using NetFlix the way you use the Apple Music Store, renting videos and downloading them to your DVR overnight for "instant" gratification, or to watch on your iPod later.
If successful, acquiring TiVo would enable Apple to position themselves as the company that finally let consumers take control of their televisions. That would be like 1984 all over again.
Disclosure: I am a shareholder of both TiVo Inc. and Apple Computer, Inc.Resources