TiVo Stock Falls After Article Sparks Concerns

John Corn

The Coach / Supporter
Original poster
Supporting Founder
Sep 6, 2003
North Canton, Ohio.
NEW YORK (AP) -- TiVo Inc. stock fell Monday after a newspaper article raised concerns that the maker of digital video recorders could get edged out of the market by cable operators in the not-too-distant future.
Shares of TiVo closed at $7.91, down 76 cents, or 8.8 percent, Monday on the Nasdaq Stock Market.

TiVo, based in Sunnyvale, Calif., has been around for more than five years and its name has become synonymous with digital video recording technology. But the company has yet to sell one million of its recording boxes.

Cable companies have started offering similar technology through integrated cable boxes -- to much fanfare among customers. The popularity of the boxes has sparked concerns that TiVo's stand-alone units could become irrelevant before long, the article in The New York Times said.

Is the integrated DVR threat to Tivo Corp. just now become legitimized since the johhny-come-lately cable TV industry has finally begun to roll out integrated DVRs?

I wonder how many DBSers didn't buy a standalone Tivo because an integrated alternative (DishDVR or DirectTivo) was available?

Maybe the original New York Times article mentions DBS DVRs more prominently than this Yahoo! tidbit does.

Reference: DISH Network First to Reach TV Industry Milestone: 1 Million Digital Video Recorders
Unless TiVo devises a new business plan, I really believe its days are numbered. There may always be a market for the stand-alone product, but it will get smaller with time, not a good outlook for a company. I wouldn't invest in it at any price now (shorting the stock would probably be a better idea).

I also believe the idea of selling its superior capability as a premium level recorder is flawed. Other companies will eventually write comparable software to control their units and won't want to pay TiVo a royalty for it.
With the new "Plug and Play" standard for digital cable what was agreed on this year for the consumer electronics, Tivo should be able to make a cable STB which can record all of the digital cable offerings.

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