Archive for category Disclosure – I own stock in co. mentioned

TiVo Granted Patent For Burning TV Shows To DVD

Ahh, the DVD. Love it or hate it, it’s still one of the best ways to store data. I’ve yet to meet a hard drive that can survive for 5 years without failing, but as long you’re not using them for frisbees, the DVD can easily make it a decade or more without being damaged. There may be a question about whether or not we’ll have DVD players to play them with by then, but rest assured your data should be there.

Given my fondness for the scrappy little format, I thought it was interesting to see that TiVo was awarded a patent yesterday afternoon (Aug. 16th) for burning TV shows onto DVD. Just about anyone who has ever used a DVR has experienced hard drive related anxiety at one point or another. With the sheer amount of television out there, it’s easy to fall behind on your favorites and run out a space. Offloading programs to a DVD library is an excellent way to free up your hard drive without having to miss out on programming that you wanted to see. In the past, I’ve found this to be especially useful for archiving syndicated TV shows that aren’t always shown in their original order.

The abstract of the patent from TiVo’s application,

“According to an approach for storing digital content onto a DVD, digital content is received from a source, such as a DirecTV link, an over the air (OTA) broadcast, over a cable television link, or any other type of communications link, including the Internet. The digital content is formatted to comply with the MPEG standard to create MPEG digital content and stored on a non-volatile storage. Text-based information is received that describes one or more attributes of the received digital content. A set of DVD subpicture graphics is generated based upon the text-based information. The set of DVD subpicture graphics may represent a structure that can be navigated by a user when the DVD is played. The MPEG digital content is retrieved from the non-volatile storage, converted to DVD format and stored on the DVD with the DVD subpicture graphics. “

On the surface, the patent itself does seem a little bit obvious, but it’s also important to remember that it took the patent office almost 7 years to approve the application. Microsoft’s Media Center may have been using infringing :) on this technology for years, but I’m not sure that they had it in place prior to 2004. I think it’s also worth pointing out that even though TiVo now owns the patent on this technology, they don’t actually offer the service to their customers. Fortunately, the TiVo Community has managed to scrape together a way to do this on your own, but it would be nice to see a more elegant solution built directly into TiVo’s software.

Given it’s antique status, some may view this development as irrelevant, but because of the complex licensing issues that are tied to media, I believe that the DVD will have a much longer shelf life than most. When you consider how the studios are using artificial windows to try and dictate when you can and can’t watch certain things on Hulu and Netflix, it’s clear that if you don’t want to become a victim of disappearing windows, consumers will need the ability to archive content on their own.

DirectTV Delays Nationwide Rollout of TiVo Until (at least) 2012

Jul 1, 2011

Photo by Mike Demers

It’s hard to believe that it’s almost been 3 years since TiVo announced that they were rekindling their relationship with DirectTV and yet consumers are still waiting for the DVR to drop. I’d say that even for TiVo, this kind of delay has to be some kind of record, except we’re also still waiting for the Comcast/TiVo DVR to launch.

Given the long lag time and complete radio silence by TiVo and DirectTV on the issue, I tuned into DirectTV’s 2nd quarter earnings call hungry for more information. Unfortunately, the call didn’t offer very many tasty morsels.

During the call, DirectTV’s CEO Michael White never actually mentioned TiVo by name, but did say that they the company planned on unveiling a new “high end” user interface in the fall (so far so good.) From the transcript of the call,

“the connected home experience is a fantastic experience. It’s going to get even better this fall with our new high-definition user interface and I think as we add more VOD titles, it’s just going to be more and more kind of pull from consumers I think for that experience and as I said, the good news is, we know it pays. It pays out because of the increased $2.50 in ARPU we get from it. But if we just kind of work in our way through some of the operational complexities of these, I think we’ve got a wireless capability that we’ll be launching this fall, as well as I think we’ll make it available to even more homes.”

He mentioned that this DVR would be entirely in high definition, would include multi-room functionality and would blow people away with it’s connected features. While it’s entirely possible that the DVR White is referring to, could be a generic update, a comment at the end of the call made me suspect that he was actually talking TiVo.

“we’ve got probably still some more work to do to fill in some more VOD content and really, with the HD user interface, really make that experience top for the consumer. I think we’re bringing Pandora, bringing in a bunch of things making it absolutely knock your socks off experience with the customer. And as I said, were already getting more than we had planned in ARPU lift out of those customers. So I feel great about the connected box strategy. I think we’re just working through some of the operational things.”

As far as I know, TiVo is currently the only DVR that provides support for Pandora.

On the surface this all may sound like good news to weary DirecTV customers, but once you actually dive into the details things get much less exciting. During the Q&A, White clarified that by “fall”, DirectTV really meant “the 4th quarter” and would later clarify that by the 4th quarter, he really meant closer to midway through it, since they didn’t want analysts to consider any revenue impact from a launch. Worst of all though, it sounds like DirectTV is following in Comcast’s footsteps, by limiting initial availability of the “new features” to select geographic regions.

“I think the nomad product, which is the ability to port your content from your DVR onto your iPad, I expect you’ll see that in some geographies before the end of the year, will probably going to do with in a fewer geographies to make sure that that’s working flawlessly before we roll it out so rollout might be in 2012. But you’ll see that before the end of the year, the high-definition user interface comes in in the fourth quarter.”

Given that it’s taken Comcast at least two years to expand out of the New England markets, I can’t help but wonder if there is some kind of clause in TiVo’s contract that encourages these sorts of soft launches. Previously, TiVo CEO Tom Rogers had argued that one of the benefits to TiVo being a software company is that they could download their software all at once to their partners and achieve tremendous scale almost overnight. As these rollout continue to “launch” though, this doesn’t look like a very accurate expectation for customers or shareholders to have.

While I’m sure that TiVo is very busy counting all of the money that they’ve made from their business dealings with Dish, it’s frustrating to see “legitimate business partners” continue to pay peanuts for development deals, when it’s clear that they’re only really interested in the patent protection. Instead of being upfront and honest with their customers though, both companies continue to string them along, while we’re forced to wait unreasonable periods for a product that will be obsolete before it’s even launched. For TiVo fans that are still holding out for DirectTV support, the only advice I can offer, is to go pick up a TiVo premiere, a set of HD antennas and make sure to tell DirecTV that you’ll enjoy saving hundreds of dollars per year while enjoying a better DVR.

Did Motorola Get Caught With A Smoking Gun? TiVo Demands Source Code Access To Secret DVRs

TiVo’s Motion To Compel Source Code

(Above you’ll find a copy of a motion to compel that TiVo filed against Motorola on July 22nd, 2011. On July 25th, the judge in the case gave Motorola 14 days to comply with the order or to explain their actions to the court. To view all of the exhibits, associated with the complaint, you may click on the following links: Declaration By TiVo’s Attorney, Court order requiring production of all source code, Motorola dodging TiVo’s phone calls, TiVo’s initial patent complaint against Verizon.) As a friendly reminder, I am both a TiVo customer and shareholder.

TiVo’s love quarrel with Echostar may have just come to an end, but they still have two more elephants lined up in the crosshairs of their gun and while I always hate to read too much into the legal tea leaves, recent action on one of the dockets, suggests that they may have just stunned one of them with a tranquilizer dart.

As part of their patent lawsuit against Verizon, TiVo had initially requested access to Verizon’s source code on their FIOS DVR. This kind of data makes it easier for TiVo to identify any potential infringement and would certainly be a key piece of evidence towards proving any patent violations. Now there are many reasons why Verizon might not want to turn over this kind of data, but where things start to get weird is that instead of objecting to the request, Verizon claimed they weren’t able to comply with it because Motorola was the one that developed their DVR. This seems fair enough, so in good faith TiVo began working with Motorola to obtain the data.

Fast forward through three months of stalling and Motorola finally turns over two different copies of their database to TiVo. The problem with this is that once TiVo started going over all the documents that they collected, they discovered that Motorola had actually developed “many more versions” of the source code using secret codes names like Burbank, Carlsbad, Del Mar and Cardiff. In total, TiVo believes that there are over 30 different models that Motorola has out there and after being stung with delay after delay over “software modifications” in their trial against Dish, it’s easy to understand why TiVo would want to exercise extreme due diligence on this one.

Once TiVo realized that Motorola was trying to pull off the old fumblerooskie play on them, they dragged Verizon and Motorola back into court and clarified that they wanted all of the source code data on their DVRs. The judge agreed and in March of this year, he ordered Motorola to release “without limitation all Deployed versions of Motorola’s Del Mar source code and all Deployed versions of any predecessor to the Del Mar source code, as well as associated Broadcom code.” [Note: Emphasis added by me]

After the subpoena, one would have really thought that this would be the end of it, but instead Motorola continued to try and string TiVo along. In the attached exhibits, TiVo demonstrated that they contacted Motorola numerous times to discuss the deficiency, yet Motorola seemed only willing to reply whenever TiVo threatened to flex their legal muscle in the case. At one point, Motorola even set up a conference call to deter TiVo from filing this motion to compel, but then opted to ditch out on the call (without even having the courtesy to cancel.)

While these sorts of petty issues won’t actually impact the case, they can still provide us with insight into the case. Motorola’s lack of responsiveness suggests a certain squirreliness on their part. Instead of portraying a company that is confident in their legal position, the attachments paint a portrait of a company that is desperately trying to do anything to avoid turning over this evidence. The very way that Motorola has treated TiVo over the last 8 months could be a primer on how to maximize passive aggressiveness by only using your caller ID. After considering TiVo’s frustration with moving the case forward and the lack of any real justifications for the delays, the judge gave Motorola a final deadline of 14 days to turn over the evidence in question or to demonstrate why they seem to feel that they don’t need to comply with the court’s instructions.

Why Doesn’t AMC Want My Money?



AMC Empire
Originally uploaded by imoteph9


Most businesses are thrilled when someone wants to give them money, but for some crazy reason whenever you’re dealing with Hollywoodnomics, logic seems to get turned on it’s head. Case in point: MoviePass

I love the movies, in fact I’d argue that I’ve probably seen more films than 90% of the population. As a moviehound, you would think that I would be one of AMC’s best customer’s, but the truth is that in the last 5 years, I’ve only seen 2 movies in the theater. While there are a lot of reasons why, it essentially boils down to the fact that it’s hard for me to justify paying $9 for a film, when I can watch it at home for free*

Now in reality, my TV isn’t actually free, but psychologically, it feels that way because I “rent” my content through services like Netflix and TiVo. While I’m sure that PPV and Blockbuster would prefer that I take advantage of their services, the simple truth is that the transaction fee involved (no matter how small) has made them persona non grata in my lifestyle.

I’ll be the first to admit that watching a film on my 60″ TV isn’t the same as seeing it in Imax, but when the choice is to pay money vs. seeing something for free*, it makes it a lot harder to accept the premiums that the theaters charge. Four years ago, I noted that consumers were making a transition from a pay per view model to a subscription model and that movie theaters would be wise to endorse the trend.

“Why not offer a monthly subscription fee to your local movie theater chains. Consumers would be happy to spend $30 or $40 per month in order to have the privilege of seeing films the way I did when I worked for the theaters. Instead of collecting $40 per year from me now, theaters could instead bring in $480 each year with an all you can eat model.”

A long time ago, I worked as an AMC projectionist and every Thursday night, I’d stay up to the wee hours of the morning screening the new films before they opened. Because of this experience, I know first hand how powerful a theater subscription model could be, which is why I’m so confused that my former employer wouldn’t recognize the brilliance behind MoviePass. What makes this all you can eat movie experience so special isn’t the access to the big hits that you’re dying to see, it’s being able to see mediocre films in a larger than life environment without having to put your wallet at risk. Yet for some strange reason, AMC isn’t interested in attracting customers to their most empty theaters.

Now I can’t speak for everybody, but in my case, had MoviePass existed back then, AMC would have collected $1,920 in ticket sales. Instead they’ve earned less than $40 from me and that includes popcorn.

Not everybody chooses to rent their content, but when you look at the number of cable, satellite, Hulu, Netflix, etc. subscribers, it becomes clear that a huge segment of society chooses to consume the bulk of their content this way. This is why, when I saw that MoviePass was going to create a subscription theater service, I thought it was a no brainer for the theaters involved.

Instead, AMC decides that they want no part of this? Can someone please help me understand how this makes sense because AMC’s justification that “plans for this program were developed without AMC’s knowledge or input,” or that “it does not integrate well into our programs and could create significant guest experience issues”, rings hollow in my opinion.

AMC could have picked up a brand new customer willing to buy tickets in bulk and instead of nurturing a new source of revenue (while MoviePass assumes the risk of proving an experimental business model), AMC has chosen to ban it because they weren’t consulted first? This seems awfully shortsighted and petty on the part of AMC.

If AMC really believed in the mantra, listen, learn, discuss, decide, execute, measure and … repeat, then they would have at least taken the time to see if MoviePass could bear any fruit. Instead, they’ve jumped straight to an execution (with a promise to repeat if anybody else decides that they want to give them buckets of money without permission.)

I could almost understand this reaction, if AMC had some type of similar program that MoviePass was competing with, but the reality is that AMC has failed dramatically when it comes to the execution of their customer loyalty programs.

For 25 years, AMC ran a program called Summer Movie Camp for kids. The idea was basically a seasonal version of MoviePass, except restricted to handful of old kids movies. Given it’s long run, one would think this was a homerun for the cinema, but I can tell you first hand that AMC did a terrible job of running it. Even on their own website, AMC admits it was a failure.

“Unfortunately, the number of guests has been fewer in recent years, with many shows operating with less than 25 guests in the auditorium. Last year, attendance dropped so significantly that we have made the difficult decision to discontinue the program.”

AMC’s most recent program, also looks like it will be a dud. Not only do consumers now have to pay $12 a year for the privilege of frequent customer membership bonuses, but they only save 10% off for every $100 they spend. This means that you would have to pay to see 33 films in a year before you would actually earn a free one under the program. It’s nice that they want to be so stingy with their best customers, but MoviePass really wouldn’t threaten this.

If MoviePase attracts moviehogs, then it will be uneconomical for them as a business. If they attract consumers like myself, who refuse to pay transaction charges for their entertainment, then it’s complimentary to AMC’s existing program and could greatly expand revenue. It’s hard to tell what the future holds for MoviePass at this point, but with the major theater cartels going hostile against this new innovator, I can only hope that independent theaters will be more interested in collecting hundreds of dollars a year from me instead.

Probst Tell Survivor Fans: TiVo Doesn’t Help Our Ratings

Over the years, I’ve had more than one love affair with a TV show, but no matter how much I’ve enjoyed epic hits like 24, Alias or Joey Grecco’s Cheaters, none of them have been able to generate the level of excitement that I feel when I watch Survivor. I’m not sure if it’s the Machiavellian nature of the show or simply being able to watch an assortment of characters who are so wacky that they end up making Gilligan Island look like the Love Boat, but I love the show so much, that I even organized a home version of the game with my family over the holidays (I ended up getting voted out 2nd for trying to emulate Russell Hantz’s bulldog strategy)

Because it is the number #1 show on my Season Pass priority list, you would think that I would never miss an episode, but every year, Survivor changes the name of their show just a little bit, so that DVR subscribers have to resubscribe to each new season. I’ve gone as far as sending angry emails to the Tribune company (the supplier of TiVo’s guide data), but to no avail.

While this may or may not be hurting Survivor’s DVR ratings, the fact that the producers of the show haven’t noticed has always baffled me. It would be like me changing my RSS feed every six months, so that only my superfans could easily follow my blog. Unless you like languishing in obscurity, this isn’t a very good strategy for retaining an audience or capturing people’s attention.

Recently, Jeff Probst, the host of Survivor, launched a blog to promote the show and other charitable causes that he cares about. On his site, he solicits questions from fans and answers the more common ones. While all tidbits about the show caught my attention, one particular answer jumped out at me. While answering the question of how long will Survivor continue to run, Probst says that the survival of Survivor is dependent upon live viewers because “TiVo doesn’t help our ratings.”

Now Jeff Probst certainly isn’t the first one to appeal to their fans to ditch the DVR, but I think that his pleas are at least a little bit misguided. I’m not sure whether it’s because the producers of the show don’t care about the DVR ratings or the advertisers themselves, but either way I think that there is a lot more value to a DVR viewer then his answer would suggest.

Over the years, I may have fast forwarded my way through more than one commercial break, but I haven’t been able to avoid the product placements that are embedded in the show. I don’t know whether or not the show makes more money from these ads, but I would suspect that they do.

Whether it’s Sears demonstrating the utility of their Craftsmen line of tools or Sprint demonstrating how you can keep in touch with loved ones on their new fancy cell phones, throughout a season there are many times where branding creeps into the show. While some may find this an annoyance, I actually enjoy this type of advertainment and it undoubtedly makes me more willing to spend my money on a brand.

During 2002, 24 introduced several cars during their program and I can tell you with 100% certainty that seeing those cars zip around in that show is what made me seek the out and ultimately buy my Thunderbird. When was the last time anyone could say the same thing about a car commercial?

Furthermore, even though I TiVo the show to watch later, because the program always leaves me wanting more, it drives me to the CBS website where you can view all kinds of clips and interviews that don’t make it to television. Unlike viewers who are tuning into the show online instead of live or on DVR, these clips are additive and include lots of spammy pre-roll ads that I wouldn’t put up with if I didn’t stay excited about the show.

It could be that Survivor is so good that they don’t need to rollover their DVR viewers every season, but by ignoring this opportunity, they are losing the ability to turn their more passive fans into passionate ones. With DVR penetration now exceeding 40% of all viewers, this kind of backwards thinking will ultimately hurt them and the show’s long term chances. So while I can appreciate that a live viewer may be worth more money to the show, I’m going to continue to time shift it, so that advertisers can learn how much more valuable it is to capture my heart for 44 minutes, then it is to hold my attention hostage for 60.

TiVo Plans To Give 1 Free Month Of Hulu+ To Subscribers

I was surfing YouTube and came across an interesting ad announcing the launch of Hulu Plus on TiVo. It appears that the ad was uploaded by the agency that created it, so it’s hard to tell what this means in terms of timing, but one tidbit that I was able to glean from the spot, was an announcement that TiVo will be giving away 1 free month of Hulu+ service when they launch it on their DVR. TiVo offered a similar promotion when they launched support for Rhapsody and while I ultimately didn’t turn into a subscriber, I did enjoy the opportunity to check out the service. The simple fact that Hulu makes their paying customers still view ads, kind of makes the service a non-starter for me, but if TiVo wants to comp me with backstage access, I certainly don’t mind taking a peek. While it’d be nice to see this launch sooner than later, at least some of the details are finally starting to leak out.

In related news, it also looks like the same ad agency uploaded a spot for TiVo’s iPad app to the site. Since TiVo announced on Twitter that this would launch by the end of January, it makes me wonder if both partnerships will be launched simultaneously. We’ll have to wait to see if this is the case, but methinks that we won’t have to wait long to find out.

The Compuservation of Television

Gossip Dirt

The more things change, the more things seem to stay the same. Over the last ten years, the internet has redefined nearly every aspect of our lives. Whether it’s how we communicate with old friends, how we get our news or how we do our shopping, I could give you countless examples of how this technology has changed the way we interact with the world.

Thinking back to when dial up was first getting started, it’s not too hard to imagine an entirely different future. You see, when internet service providers first got into the business, they didn’t want to provide unrestricted access to their subscribers. Instead, they wanted to create a massive intranet where they could charge businesses fees to reach their customers.

In this bold new world that they envisioned, people wouldn’t be buying search terms on Yahoo!, they’d buy keywords on AOL. Instead of being able to use any email provider you wanted, they would only allow you to log into Compuserve accounts. This balkanization of the internet almost succeeded and for a time, Compuserve actually ran one of the top airline ticketing services, but eventually consumers saw the forest for the trees and instead of paying $19.99 a month for a stripped down version of the world wide web, they insisted on unfiltered access to the internet.

Once a few consumers started to move, the rest of the industry followed and as a result we now have third party sites like Facebook, YouTube and blogs, that have been able to build an audience on the free and open web.

With online video still coming of age, it’s interesting to see how the same Compuservation is occurring again, except this time it’s around the television. NewTeeVee has a provocative post out where they argue that the smart television providers are becoming the new gatekeepers for content. This is better than having the cable companies control your television, but it’s is still a watered down version of what you deserve.

I don’t care whether we’re talking about TiVo, Boxee, Roku, AppleTV or any of the latest digital video solutions, all of them have placed restrictions (albeit sometimes unwillingly) over how much their customers can do with their hardware.

Some of these restrictions are because of frightened content owners. For example, customers who rent their TiVo from a cable company aren’t allowed to access Netflix because of agreements Netflix made with the studios. Some of these restrictions are because of plain old fashioned greed. Hulu has already had more than their fair share of conflicts from disabling access to their videos on devices that are designed to sit next to your TV and would love to charge hardware companies for access. Some of these restrictions are self imposed. There’s nothing stopping Apple from offering flash on their iPad, except for their own selfish desire to control 100% of their media eco-system.

Whatever the reason, no matter how you slice it, these “internet” enabled devices have all failed to actually bring the internet to your TV. Looking over the headlines from CES, it’s clear that tablets and “smart TVs” were all the rage in Las Vegas this year and while it’s neat to see content companies start warming up to these devices, if consumers are forced to continue at big media’s pace, it will take another 10 years before you’ll be able to access even 90% of the content that’s out there today.

Because of these restrictions, it’s become increasingly difficult for me to endorse these options as adequate solutions. Over the years, I’ve managed to sample and collect a large number of different media streaming devices, but by far, the most powerful digital media device that I’ve ever used was the cheapest laptop that I could buy from Walmart. Maybe I’m crazy and other people don’t actually want access to the internet on their TV, but from the very first moment that I plugged it into my television, it was just as liberating as the first time I used TiVo to free my TV.

Since almost all new laptops include an HDMI port, getting it connected to the big screen was as easy as plugging it into an HDMI cable. Not only will this setup let you access sites like Hulu without big media interfering, but I can also do PC related tasks on a big screen environment. For example, over the holidays I was able to connect to Skype and do a video chat with the entire family on the big screen. I’ve always been a fan of comic books, but the comic book experience is very different when you’re looking at the action at 40+ inches. Do you ever play video games like Axis and Allies? Being able to see the entire war map actually changes your strategy compared to when you have to view troop movements region by region.

The point that I’m trying to make is no matter how progressive and advanced these technology companies are, no matter how many “apps” developers create, until the CE industry and the content industry abandon their gateway plans, you’ll never get to experience everything that the world wide web is capable of.

Instead of navigating this minefield of short sighted media companies and a CE industry that has lost sight of who their real customers are, take my advice and buy an HDMI enabled laptop before you buy the latest and greatest half baked technology product. A cheap laptop won’t necessarily make it easy to record your broadcast television, but if you’re only going to own one media device for your TV, an HDMI enabled laptop will beat the pants off of any digital device on the market today.

Comcast Raises DVR Prices For East Bay Residents Yet Again

I think that most people realize that TiVo is about 1000 times better than the DVR that you get from your cable company, yet the cable companies still continue to rent out their DVRs by the truckload. This mostly has to do with the convenience of getting your set top box directly from your television provider, but some are under the false impression that they are saving money by renting their DVR instead of buying.

I was recently perusing my Comcast bill and noticed that they are once again raising prices on their DVR packages. At. $19.95 per month, it’s still 48 cents less per year than what TiVo currently charges for a TiVo premiere with no up front cost, yet millions of people still put up with a sub-par DVR experience at virtually the same price. Over the last 10 years, I remember TiVo raising prices once, over the same period it feels like Comcast has raised prices every 6 months. On the surface, $19.95 per month for a DVR may not sound like a lot, but thanks to the most recent rate changes, it now costs East Bay Comcast customers more to record their television each month, than it does to subscribe to their basic TV service.

It would be one thing, if Comcast was using your $240 per year in DVR fees to keep improving their DVR experience, but anyone whose used the device knows that it still suffers from severe lockups and buggy/slow interactions. Heck, even if the cable dinosaurs wanted to innovate, because of how much money they pay the content industry, they’re still prevented from offering services like Netflix on their DVRs.

Best Buy Bankrolls TiVo’s Marketing

TiVo and Best Buy BFFMoney may not buy you love, but it can apparently buy you an exclusive for TiVo’s March 2nd secret product, according to a leaked memo from Best Buy. TiVo blogger Dave Zatz received a copy of the memo from an anonymous source and and while we haven’t received confirmation that the memo is legit, it certainly sounds like big things are in store for TiVo over the next year.

If the memo is accurate, TiVo is about to receive a $20 million advertising windfall from Best Buy, in exchange for giving them a national retail exclusive on their secret product. To help put this into perspective, over the last 12 months TiVo spent a mere $4.7 million of their own money on advertising, so this could go a long way towards boosting subscriber acquisitions.

Here’s a complete copy of the memo,

“You Think You Know TiVo? You Haven’t Seen Anything Yet.

Inventing the DVR was just a warm up for TiVo. Some exciting things are now in the works over at TiVo, and Best Buy is along for the ride. TiVo is currently working on something major that will literally transform the way people watch TV, and Best Buy will be the only national retailer offering this unsurpassed entertainment experience. In fact, Best Buy and TiVo are taking their partnership to new levels in FY ’11, with Best Buy investing more than $20 million in marketing TiVo.

As you know, when we sell TiVo, our customers get a superior entertainment experience, with easy access to the world’s largest on-demand library. Selling this offering also creates amazing incremental margin opportunities for our stores. TiVo therefore represents a perfect example of a product that meets our goal of getting our customers connected and our goal of driving incremental margin, both which are a focus of this upcoming fiscal year.

On March 2, TiVo’s game-changing plans will be revealed, so stay tuned. You’ll want your sales associates to know all about this exciting news, so make sure they check out TiVo’s new eLearning on Learning Lounge, starting on March 3.”

After thinking about the memo, a couple of things really jump out at me. First off, I’m surprised at how excited Best Buy seems to be about the product announcement. While I expect that TiVo would want to generate as much hype as they could for their upcoming press conference, Best Buy wouldn’t need to do this for a memo that was never meant to go public. Yet, in their memo they use some pretty strong language to describe TiVo’s top secret product.

Terms like “something major”, “unsurpassed entertainment experience” and “transform the way people watch TV” would all suggest that TiVo’s announcement is going to be a bit more significant than the addition of a QWERTY remote or placeshifting abilities. While claiming that the DVR was just a “warmup” may be an impossible standard for TiVo to beat, this memo would suggest that something radical is in store for TiVo fans.

While it’s always possible that the memo could turn out to be an unsubstantiated TiVo rumor, some of Tom Roger’s comments from their last earnings call lend credibility to the leak. After being challenge by an analyst over TiVo’s subscriber defections, Rogers had bold words about the budding relationship between the two companies,

“We do think also that those trends can begin to be reversed. That is not something that will take effect in any meaningful way for this holiday season, because it’s dependent on some future development that we want to have for Best Buy before they really light up their promotion and marketing undertakings. Once that’s in full swing, that too should begin to well reverse those trends in 2010, at least that’s what we are working toward.”

Giving Best Buy an exclusive could potentially backfire on TiVo by making them less attractive to other retailers, but $20 million in advertising would certainly go a long way towards jump starting subscriber acquisitions once again. If internet retailers like Amazon are still allowed to sell the new hardware, the extra marketing would more than pay for any strained relationships with companies like Radio Shack. If you also include the advertising that DirecTV is expected to do, once their product launches as well as any potential advertising that TiVo could see from Comcast (if their product ever actually goes national), TiVo could see their most significant subscriber gains in years.

While we won’t know how much of this is hype vs. reality until TiVo holds their press conference on March 2nd, Best Buy’s leaked memo certainly makes this something to watch live, instead of TiVoing the event.

TiVo Granted Patent For The Season Pass

TiVo Season Pass ManagerThe US patent office must have gotten their hard drives unpaused, because hot on the heels of winning a patent related to closed captions on a DVR, TiVo has been awarded another patent at the heart of the DVR experience. With the application having been filed in October of 1999, it took the USPTO over ten years to review and approve their request, but on February 16th, TiVo was given the legal exclusive on season pass technology.

For those of you unfamiliar with how a DVR works, part of their magic is the ability to let you record shows in the future without having to worry about when it’s on. Back in the ole VCR days, you’d typically have to manually tell your gadget what time and channel you wanted it to record, but with TiVo (and other DVRs) they keep track of this information automagically and records your programs whenever it’s scheduled to be on. Because the TV studios tend to schedule all of their good programming at the same time (I’m looking at you Thursday night), there are sometimes conflicts between what you’d like to record and the number of TV tuners available to do it.

To resolve these issues, TiVo created a season pass manager that allows you to prioritize which shows get recorded and which ones don’t. This helps to make sure that I always get to watch Survivor and CSI, even if it means that I sometimes have to skip Community.

From patent 7,665,111,

“The invention correlates an input schedule that tracks the free and occupied time slots for each input source with a space schedule that tracks all currently recorded programs and the programs that have been scheduled to be recorded in the future, to schedule new programs to record and resolve recording conflicts. A program is recorded if at all times between when the recording would be initiated and when it expires, sufficient space is available to hold it. Programs scheduled for recording based on inferred preferences automatically lose all conflict decisions. All scheduling conflicts are resolved as early as possible. Schedule conflicts resulting from the recording of aggregate objects are resolved using the preference weighting of the programs involved. A background scheduler attempts to schedule each preferred program in turn until the list of preferred programs is exhausted or no further opportunity to record is available. A preferred program is scheduled if and only if there are no conflicts with other scheduled programs “

Without the ability to do this, the DVR would be as hard to program as the blinking clock on the front of your VCR. Recognizing how crucial this feature was to the DVR experience, TiVo moved aggressively to patent the feature, before they even rolled out their technology to the public.

In the ten years since then, TiVo’s season pass technology hasn’t really changed all that much. Most of their DVRs now come with two tuners instead of one, but the basic experience has remained the same.

Two improvements, that I’d like to see them make to their season pass manager would be faster processing times for when you want to rearrange your priorities or delete season passes and some kind of a menu that can identify future conflicts even after you’ve already scheduled your program list.

If TiVo introduces a DVR with faster microchips at their March 2nd press event, the long delay after reorganizing your season pass should take care of itself, but making their conflict resolution program a bit more robust would need some kind of a software upgrade.

While TiVo is good at pointing out conflict issues when you first schedule a program, they rely solely on your prioritization list when considering future conflicts. This may ensure that the programs you care about most get recorded, but it can make it difficult to know when you’ve missed an episode because of a scheduling change. In the past this hasn’t been much of an issue because the consumer’s only option would be to wait for a rerun, but with sites like Hulu and Netflix now streaming the repeats, it would be nice to be able to view some kind of a report of what you missed that week, so that you could watch any missed programs online.

While pretty much every single DVR currently uses this embodiment of the season pass manager, TiVo’s latest patent isn’t without a workaround. Because it was invented during a time when cloud computing was an expensive pipe dream, TiVo only patented the client side application of this technology. In other words, as long as the conflict resolution is done remotely on a server, competitors like Microsoft and cable companies could avoid infringement. Of course, this could potentially be a lot more expensive than licensing the patent from TiVo to begin with, but given the current trend towards remote DVR services, the USPTO’s long application process may have made TiVo’s invention obsolete, before they’ll have much of a chance to enforce it.