Let's take a step into the way back machine and rewind our Tivo story to 1987-88. Time Warner was shutting down the Full Service Network (FSN), an experimental excursion into interactive television. Jim Barton one of the architects of FSN and Mike Ramsay both former SGI executives got together to start Tivo. Their ideas somewhat inspired by FSN and the ability to control the TV experience led them to create the worlds first Digital Video Recorder. What made Tivo special was it's easy to use interface and intuitive way to record and rewind live TV.
Tivo delivered on it's promise and provided a great experience but it couldn't get momentum primarily because it couldn't define and explain the offering that it created. Basically it failed the "explain it to your mom test." If you can't explain the product easily, you'll have lots of trouble selling it.
"Is it like a VCR?"
"Yes but there are no tapes, and it needs a phone line, and you have to pay monthly"
Part of this was a huge marketing mistake. Introducing the DVR acronym gave people the VCR association and made it harder to understand. The other mistake wasn't the product but the business plan. It was becoming popular to charge for things as a service so instead of pricing the hardware slightly above cost or simply liscensing the software to PC makeers Tivo sold it's hardware bellow cost in hopes of making up the difference in subscription fees.
These mistakes compunded but the real mistake is the lack of innovation. Since the original release of Tivo there has been very little product innovation. Sure they've added some features, partnered with some hardware companies but the core experience is still the same. To make it through another 5 years Tivo has to go back to it's roots and remember the original vision to provide not only on-demand TV but fully interactive television.
- I want to to play interactive jeopardy
- I want to pick my camera angles for Baseball games
- I want to watch archived Tonight Show episodes
- I want to vote for my american idol with my remote control
- I want the world of information at my fingertips and I'm not the only one.
Boing. Boing. Boing. Fast forward to the present. If Tivo doesn't innovate and do it now, it'll be a footnote in the history books of television.