I have a TiVo.  I recently was shocked that I met some young adults who were simply not familiar with the brand.  Shocked because if you are not familiar with TiVo at one point it was like Coke or KLeenex.  It defined its category.  The product is now generically called a DVR, or Digital Video Recorder. How did this happen and why do I care?

TiVo is a fascinating study in a great product that was destroyed by the system.  In this case, the system was government regulation trying to force openness and an industry that fought tooth and nail to keep an amazingly customer friendly product from taking away revenue, customers be damned.  Long story short, the industry pretty much won and customers lost out.  The longer story is that back in the days of standard definition television, all televisions could take an analog signal and they could decode it.  The basic tier of service offered by the cable companies generally was not encrypted.   The cable companies methodology of security amounted to putting a physical lock on the end of the cable.  TiVo came out with an recorder just as hard drives became big enough to record a few hours of video.  Plug it in and you could record shows, skip commercials, and the box was smart enough to catch your programs even if they were rescheduled.  Even before today’s cloud based artificial intelligence, the box included technology to guess what you may be interested in and record that.  There was even a meme about TiVo thinking you were gay before meme’s were a thing.

Initially there were warning signs as the technology was boldly stolen when TiVo brought it to one of the nation’s largest TV providers.  But TiVo still had the hard line CATV market to go after.  Then the digital TV transition happened and the cable companies saw their chance to kill competition.  Digital cable television required a decoder box, something like TiVo and it’s competitors were absolutely perfectly positioned for, and the federal government wanted an open market for these boxes.  But rather than disallow CATV companies from providing their own boxes, they were only required to offer access to a technology called cablecard that would allow the networks to work with non cable company provided boxes.  The industry of course did everything in it’s power, from contracts, good enough hardware, pricing, to structuring their internal customer service systems to stop cablecard based alternatives from being adopted.  So for years and years the term TiVo was slowly replaced with the generic term: DVR.  It took decades to realize this, but ultimately the truth that the attempt for an open market was a dismal failure.  The cable companies fostered horrible low quality and high cost boxes with barely usable recorders in them.  In the end, TiVo is the last alternative DVR provider holding onto a dying market.  

Then market Disruption.   TiVo got so stuck in the battle of being a cable box, they almost completely lost out on the market move away from traditional television to streaming and gaming.  They are really late to the party, but they at least recognize what they need a plan to survive.  

There are several lessons we can take from this situation if we stop back to look at the macro picture.   For example, TiVo needed to look to the future.  The genesis of the company was the future of Television , but when defeated, they stopped looking ahead.  TiVo was being realistic about its situation, the day the CATV companies were put in charge of cablecard is the same day that TiVo should have started looking at alternatives for its television platform.   Instead TiVo moved from innovation to patent holding business to leverage what they did have.  They wasted their strategic advantage of including an over the air tuner, something no high quality streaming box or gaming system currently offers.  

TiVo never defined a competitive advantage.  It’s imperative that you have a competitive advantage or you will lose.   TiVo needed to either be a free alternative forcing the cable companies to not charge for their boxes, or they needed to have so much higher of an offering that people would move to get to an area where they could get the service.  Sound implausible? Think about Google Fiber’s impact on housing  today.  There was so much lost opportunity.  Dead simple media server, App Store, Gaming, integration into televisions, direct retail locations, streaming, content offerings.. the options were limitless.  Yet TiVo chose high monthly prices and patent litigation because they tried to survive in a world of cable company sharks.  

There are parallels to the Professional Individual Contributor World.  We did what we were supposed to do and in many cases including education, retirement, housing, we were held back by the system that was enacted to help but ultimately was stacked against us.  Our bachelor’s degrees don’t pay out like we thought they would.  Our retirement is woefully under funded and social security isn’t strong enough to pick up the slack.  We are told we work for family friendly companies that don’t pay enough for a middle class lifestyle with a stay at home parent.  

I believe that as a generation of individual contributors we are making some of the mistakes as TiVo.  We know the situation, we know it’s stacked against us, yet we continue to play in the arena we started playing in.  We aren’t doing anything different, not really different.. we are paused,  just treading water.  

So this is an old story to be studied.. except now the old arguments are coming around full circle again.   Will TiVo jump on this bandwagon or pivot like they need to?  Maybe new owners who pride themselves on innovation can turn around a forgotten giant.  

Our old arguments continue to come full circle as well.  Every time we need to jump a job, every time we have to make a major life decision.   There is a tendency to stick with what we know, and just like TiVo it’s because we don’t want to lose what little we have.  I don’t know if TiVo will be able to truly pivot or stay focused on the cable box market.  I am fairly confident that as a generation, as a group,  PIC’s need to pivot.  If we can’t change the system, then we need to find a new system.  Right now as a generation we are holding steady.  Waiting.  Regardless of what we do, we need to press the play button again and see what’s next.   Or maybe we can press fast forward, that would be fun too.  

Advertisements

Posted by Mike Peluso

Mike Peluso writes about the collision between between the business / professional world and life. He also writes about the journey involved with the Peluso Presents efforts including the Blog, Books, and Podcast so that others may benefit from his efforts. Read the Blog: www.PelusoPresents.com/ Listen to the Podcast: http://pelusopresents.libsyn.com/ Support the Effort: https://www.patreon.com/pelusopresents

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s