Why Philips and DirecTV Invested in TiVo
The allure of time-shifting, inter-active features attract companies
From Electronic News--May 10, 1999
By Peter Brown
San Jose--During the past two weeks, the spotlight in the consumer market has been on
TiVo Inc., with electronics giant Philips Electronics N.V. and satellite television provider
DirecTV Inc. both taking equity investments in small consumer electronics vendor.
The question is why.
The answer boils down to desire by consumers to watch television programming exactly
when they want to, which is exactly what TiVo's Personal TV product delivers. On a
basic level, Personal TV is a VCR replacement. But more than that, TiVo enables a
feature known as time-shifting, wherein television shows can be viewed in their entirety
with the start time and the end time displaced by a period of time.
For example, if a viewer chooses, he can watch a television show that begins at 8 p.m.
and ends at 9 p.m. from 8:10 p.m. to 9:10 p.m. instead, or from 8:30 p.m. to 9:30 p.m.
Consumers can rewind and fast-forward their televisions. They also can pause the show
they are watching for as long as 30 minutes.
This feature allows consumers to see an entire program, even if they have to leave the
room to answer the telephone or to use the bathroom, said Mike Ramsay, founder and
CEO of TiVo.
Beyond the time shifting feature, Personal TV also allows for e-commerce through a
television port and potentially can support multiple levels of interactivity to subscribers.
The demand for interactivity in programming and future television viewing is becoming a
hot button item in the consumer electronics market. No longer a secondary option to
video and audio, interactivity has become a driver for many consumer electronics
products. Because of this, more companies are looking at options like Personal TV and
taking a stake in their success.
"Research suggests that consumers want a more personal and convenient viewing
experience," said Roel Pieper, executive vice president of Philips Electronics. "Our
investment in TiVo reflects our commitment to Personal TV in general, a category which
we think will fundamentally change the way people view television."
However, TiVo has competition from companies offering similar technologies, such as
Replay Networks Inc. with its ReplayTV. ReplayTV comes in the form of a set-top box
which viewers can use to personalize their televisions so they can watch favorite
programs whenever they want.
Also competing in this space is C-Cube Microsystems, which has chips that do the same
thing, recording current programming for later playback. C-Cube is working with set-top
box OEMs to add this technology to future STBs. DVD in the future also may emerge as
the recording medium that serves as a VCR replacement.
Competition is also coming from the other hard disk drive (HDD) manufacturers who are
looking at set-top offerings of their own. DVD-RAM and other DVD technologies may
also pose a threat in the near future to what Tivo and Replay Networks are trying to do.
Needless to say, with all these different approaches for recording and playing-back TV
content, Philips and DirecTV are taking what they feel are the right steps for what
consumers will want in the very near future. All of these offerings also will allow for future
endeavors into other interactive programming and content that consumers will demand.
The initial product from Philips will be a stand-alone Personal TV receiver and service
for the United States that Philips will market and distribute. Both companies also have
agreed to collaborate on a range of products.
DirecTV, with its equity investment, becomes the largest corporate investor in TiVo, with
an ownership position in excess of 10 percent. Philips, DirecTV, and TiVo also have
said they will collaborate on a Philips-branded DirecTV system receiver that will allow
viewers to get both DirecTV programming and TiVo's service. |
