TiVo Looking for More Set-Top Deals with Cable Operators in Transition to Advanced TV
The amount of choice consumers have in video content is “overwhelming and chaotic,” TiVo CEO Tom Rogers said Thursday at the Sanford Bernstein investor conference in New York. Citing the addition of subscription VOD, traditional VOD and content from aggregators including Netflix and Vudu to linear TV channels, Rogers said the “march of ongoing choice” is the overall theme of the media landscape. TiVo wants to “provide order” to the chaos and help consumers get to what matters to them, Rogers said. The company also desperately wants a bigger chunk of the set-top business as cable operators evolve from quadrature amplitude modulation to Internet Protocol TV world.
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On whether TiVo envisions additional partnerships similar to the one it has with Virgin Media to supply TiVo-powered set-tops for Virgin’s TV Anywhere service, Rogers referred to “a lot of operators covering several hundred million subs” worldwide that will need to make the transition from providing linear TV to offering an amalgam of content. That includes linear, SVOD, recorded TV and other over-the-top services that need to be presented to consumers in a “usable form,” he said.
Ten of the top 20 cable operators in the U.S. use TiVo for an advanced TV solution, Rogers said. He called that the “tip of the iceberg” as operators look to hold onto subscribers while more viewing options emerge. He posed the threat of Apple and Google entering the TV space and “defining the experience” that cable operators currently provide to subscribers. There’s a fear among cable operators that the value they provide will be “bled away” by Apple and Google which offer their own content.
Rogers said TiVo provides a balance between proven implementation and a known brand. He said TiVo can provide a “fast track” to next-generation technology for a cable operator to integrate TiVo technology within four months for a “couple of hundred thousand dollars.” The TiVo brand on a cable set-top box is a mark of differentiation in a competitive market, he said. Rogers predicted a “number of additional operator relationships” for TiVo, citing the addition of operators in the U.S. over the past year which were not known to be “early movers” in technology innovation. “It’s only a question of when” cable operators determine how they're going to address OTT video to take advantage of the pipe they already have into the home, he said.
Positioning TiVo for the set-top-free IPTV world, Rogers said TiVo can exist in an environment that’s not set-top box-centric. TiVo can offer a “full spectrum” of QAM- to IPTV-based solutions, he said. Sweden will be the first country to offer a TiVo-based IPTV solution without the need for a set-top, he said.
Elsewhere in Europe, Virgin Media, using a TiVo box, was the first major operator to roll out with an advanced TV offering, Rogers said. Virgin Media is being bought by Liberty Global, and Rogers sees that as an opportunity that didn’t exist before when Liberty used a competing advanced TV solution. “Now that Virgin is 40 percent of the value of Liberty Global,” Rogers said, it “opens a door” that wasn’t there before.
Studio rights agreements are an advantage TiVo brings to cable operators in the streaming world, Rogers said. Major aggregators have studio rights agreements that preclude their content being distributed through a cable box, he said. Early on, cable providers didn’t consider that an issue because their content was available through other channels, he said. Now, aggregators are becoming “increasingly meaningful,” entering into exclusive rights agreements and offering original programming and investing in their brands to set them apart, he said. The inability of cable operators, because of those agreements, to offer subscribers access to exclusive content from Netflix, for example, through operator-provisioned boxes, is a “twist” for the cable world where operators have traditionally been the ones to offer the widest choice of content, Rogers said. TiVo is a solution for that by offering Netflix and Amazon content, he said.
Rogers cited Comcast’s premium package that includes all the linear and VOD channels along with streaming content from Netflix, Hulu, Amazon, YouTube and Spotify supplied through a TiVo box that the operator’s subscribers buy in a wireless package model. A TiVo set-top is the only way Comcast subscribers can get that combination of content because the operator doesn’t offer another way to get Netflix or Hulu via a box, he said. TiVo is looking to secure similar deals, he said.
Most of TiVo’s cable distribution deals are with smaller companies, but Rogers said for the first time in the history of the industry, “the smaller guys are moving more quickly” to next-generation services due to competitive pressure. While he sees continued consolidation in the cable industry, he said that could work to TiVo’s advantage as in the Virgin-Liberty Global deal where TiVo “ended up with a dialogue with a major operator that we would not have had but for the fact that they were acquiring a smaller company we had begun working with.”
On how TiVo is positioning itself as a better alternative to other DVR offerings available -- including Verizon’s FiOS with its own DVR -- Rogers focused on the cable industry and sidestepped the reference to the telco’s pay-TV service. He cited the TiVo Stream box that allows subscribers to transfer recorded shows to mobile devices, which he called “the only way” to do that in the cable environment. He also touted TiVo’s filtering features to help consumers find shows they want to watch.
Rogers mostly focused on TiVo versus the set-top box, where set-tops don’t offer the ability to search for content by keywords or consumers’ personal point of reference. TiVo’s future strategy is to offer more personalization. “Everybody has a different view of what’s important,” Rogers said, including favorite channels, favorite reviewers or sports events. “Every time you turn on the TV, you should have a dashboard that’s filtered just for you and your tastes,” so choices that are relevant to each viewer “are hitting you in the face,” he said. Offering that level of personalization and integration takes a lot of filtered metadata from programming and user data from viewing habits and then integration with the service to be current each time a viewer turns on the TV, he said. TiVo’s biggest challenge is explaining that in a 30- or 60-second ad, he said.
Getting consumers to experience and understand the benefits of TiVo is the company’s biggest hurdle, which is why the cable provider channel is so critical to its future, Rogers said. “The operator is a great force for us because the operator makes sure it’s in the home and people can experience it -- something we couldn’t assure with a retail-type sale.”