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It's a DVR, but it's probably not TiVo

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TEXT OF STORY

Scott Jagow: Dire Straits got it right: installing microwave ovens. Custom kitchen deliverie . . . ies. The economy needs people to buy things like appliances and cars and machines. They're known as durable goods. And last month, orders for those big items shot up 1.3 percent, a much bigger increase than expected. A strong number points to some consumer confidence, and it's a sign companies are spending money as well.

. . . Wait, let's Tivo that last part. And it's a sign companies are spending money as well. See, Tivo has become a verb, just like Google. But while Google is still dominating its business, TiVo is getting crushed. The company turns in its latest profit report today. More from Dan Grech.


Dan Grech: Twenty-six million households in the U.S. have digital video recorders. Less than 7 percent of those subscribe to TiVo.

Joseph Jaffe is author of "Life After The Thirty Second Spot." He says cable and satellite companies have undercut TiVo on price. While TiVo charges $12.95 a month, the TV providers often offer their DVRs for free.

Joseph Jaffe: They're able, because of their size and scale, to charge next to nothing -- almost to commoditize DVR.

TiVo has tried to enhance its appeal by partnering with Amazon.com, YouTube and Walt Disney. This morning, it announced subscribers can now automatically record shows recommended by the magazine Entertainment Weekly.

Jaffe: All of these service functions or features or enhancements might come together to create that one plus one equals three effect.

So far, the math for TiVo hasn't worked out. In 11 years, the company has only posted two profitable quarters.

I'm Dan Grech for Marketplace.

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Oh how I love my TiVo! But while I've owned a Series 1 for years, only recently have their units come down in price to where we're tempted to buy again. What's stopping us? Three things: no-name manufacturers (why fire Sony?), no satellite service compatibility (what a mistake it was for them to lose DirecTV!), and lack of faith that the company will survive as long as the box (which would leave me with a very expensive, somewhat "hackable" Linux computer with a relatively tiny hard drive).

Perhaps a major change at the top of TiVo is in order? They haven't made an intelligent decision in over 9 years, as far as I can see.

Although the article has some valid points, I believe the lawsuit will have a much greater impact on TIVO's profits than suggested. In addition, despite Apple, google, Micrsoft and Amazon's attempts to come into america's livingrooms, Only TIVO has built a successful model - clearly a takeover candidate for one of the above (or Yahoo if it could wake up).

That is the message of TIVO that I approve.

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