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Learning from TiVo

July 12th, 2004 · No Comments

Gen Kanai points to a Forbes article in TiVo and a survey conducted by the Forbes columnist Sam Whitmore which was released back to readers. From the Forbes article:

With only 304 employees, pipsqueak TiVo somehow continues to disrupt one institution after another. No other $141 million company has come even close to transforming government policy, audience measurement, direct response and TV advertising, content distribution and society itself.

Just look at what a new idea can do.

  • Government. This year’s censorship crusade by the U.S. Federal Communications Commission came about not because of Janet Jackson’s Super Bowl wardrobe failure per se, but because hundreds of thousands of TiVo-equipped households could replay the incident, pause it, or freeze-frame it. Unlike a VHS tape, a TiVo captures video digitally, making it much easier to manipulate and proliferate. To regulators, that’s scary.

  • Audience research. TiVo and Nielsen Media Research inked a deal earlier this year that will help Nielsen better understand how DVR users watch television. Nielsen knows that the diary era is fast ending. As long as the statistical sample is large enough, what would advertisers pay to know which ads get zapped and which don’t?

  • Direct-response advertising. TiVo already offers TiVo Showcases, video infomercials downloaded to the viewer’s TiVo unit. Someday, expect TV programmers and advertisers to embed signals in their content prompting TiVo users to learn more about a product or service, while the DVR dutifully spools the live broadcast for later viewing.

  • TV advertising. TiVo is to thank for TV’s booming product placement business. The sanctity of the 30-second spot is next. Be prepared for future TV advertising to be sold by increments of one second. Some wags foresee slow-motion commercials that will play back at normal speed when DVR users fast-forward through them.

  • Content distribution. Using broadband Internet connections, TiVo wants to turn its DVRs into collectors of any digital content you can imagine. TV and radio shows. Movies. Photos. Music. All searchable by keyword. It doesn’t have to be brand-name content, either. Think of all the niche video that’s never seen because cable TV chooses not to carry it.

  • Society. We now assume we’ll watch TV programs on our own schedule. We pause live broadcasts and miss nothing. We blast past commercials if we wish to. And we expect our DVR to record programs we’d like but didn’t know about.

    How’s all this for a case study in disruption? Because of TiVo, each institution or industry cited above has no choice but to change, and with change comes investment opportunity. Is there a TiVo on the horizon in your industry?

  • Tags: Management

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