This is the kind of story I hate to see. TiVo essentially invented the TV recording technology category. The company created a great brand name---unique, memorable, and expressive---and benefited from great buzz. Early TiVo users were rabid evangelists, extolling the myriad benefits of the service to the non-initiated.
But a few short years later, TiVo finds itself struggling for market share. How could this happen? Lightning fast technological innovations made it possible for a whole bunch of TV cable providers and consumer electronics retailers with better distribution channels, and in some cases, better software and equipment, to jump into the category. They quickly commoditized the service by lowering the price, bundling it with other offerings and offering free equipment.
Now TiVo is offering a deal: free set top DVR boxes in exchange for a longer term, higher priced service commitment. I hope I’m wrong but while it may result in a short term bump, competitors can, and likely will, likely match or trump this tactic. And then what?
It’s not necessarily a good sign when your brand name becomes the de facto term for the category, unless, like Google, you’re the proverbial 600 pound gorilla in the category. If consumers equate your brand name with the service, and competition commoditizes that service, it’s tough to reassert a unique value proposition.
great point on AOL. Thanks!
Posted by: ahs | Wednesday, March 01, 2006 at 11:29 AM
Technology has a way of comoditizing services in a instant. The tivo story reminds me a bit of AOL - remember them? They led the way for what 5 years or so only to have their service offering be commoditized and they have been struggling ever since. They are still trying to convince a commoditized market that they bring addtional value - 'want a better internet?'.
I agree that Tivo may get a short term bump in revenues, but in the long term things are going to be tough.
Posted by: Gregg | Wednesday, March 01, 2006 at 08:57 AM