“In the grand scheme of things, if Tivo went away, so what?” asks Michael Paxton, an analyst with InStat/MDR. “Other companies picked up on the technology and other program guides exist that are just as capable and there are better business models out there.”
Of course, Tivo doesn’t have to “go away” to go away. In other words, with its incredible shrinking market capcurrently at $313 millionit becomes a juicier and juicier target for acquisition.
If that’s true, the question then becomes: who will buy them?
One name that’s been batted about for at least two years is Apple, which recently upped its push into the home entertainment space with its emphasis on media (audio, video, photo) management software and more recently the iPod. That maps with Tivo’s recent efforts to become an all-digital media hub. Apple could combine Tivo’s software with its own to make photo and video viewing and music listening on the television a seamless experience. Both company’s products inspire fanaticism among the minority who use them.
While Apple seems a good fit for the company, another industry often mentioned as a possible suitor, in fact, does not. Many observers have mentioned cable companies as potential buyers, and with Tivo’s recent multimedia pushes, that possibly grows more distant.
,Here’s why: First, most major cable companies are already offering their own DVR products with their digital cable plans. Second, Tivo’s aggressive moves into multimedia management and TivoToGo make the product more like a computer than a souped-up VCR.
“Tivo is a $100 PC,” says Ernst. As such, the support issues and costs surrounding the device would be problematic for cable companies. “Cable companies don’t know the difference between a JPEG and an MPEG and they don’t want to know.”
Still, with Tivo’s recent stock price troubles, the company held a 20 percent off sale for any businesses interested in purchasing it. The company isn’t in its last throes by any financial measure, but expect a lot of speculation on the company’s future in 2005.
The drama may be more entertaining than any program it can record.