PVR Wire

1. I would love to see Apple license Tivo technology for the "iTV". Tivo does have the lock on the programming guide, but I'd love to see Apple work with Tivo on MRV and on the fly conversion to view recorded media on Tivo box and play on iTV. THAT would make me buy a new Apple product!

Posted at 12:56PM on Dec 6th 2006 by Steve

2. I'm not sure that TiVo could license the EPG. From what I understand TV Guide owns the rights to that, not TiVo. I don't necessarily buy into this rumor either, but I disagree with your reasons why this isn't likely.

Apple isn't interested in selling content, they're interested in selling gadgets. Estimates put the profit that they earn for each song that they sell at somewhere around .10 per song after everyone gets paid. While this is certainly attractive in that the .10 is easy pickings for Apple, even taking into account that they've sold a billion songs, it still doesn't add up to all that much in revenue. ($100 million over how many years?)

On the other hand, if you consider the profits that they make on the iPod sales, it makes the song royalties pale in comparison. PC World estimates that Apple makes around $40 for every shuffle sold. This means that we'd need to see someone buy 400 songs from iTunes before they'd make more then what they make on selling the gadget and this is for their lowest priced unit. If you look at the profit margins on their bigger iPods, Apple needs to sell even more songs before music and video is the strategy over hardware sales.

The very reason why Apple supports mp3's on their iPods and not just iTunes is because of these fat margins. Rather then restricting playback just to their purchases, they'd rather sell of ton of iPods and let people get the content from other places for free. If they end up buying iTunes that's great, but Apple would rather never sell you content and sell you the gadget, then to reduce demand for the gadgets. This is why the studios got so excited when they got Microsoft to pay a sin tax on their Zune. You can bet, Apple won't ever give in to that demand.

If you look towards the television market, we've seen iTV boxes without tuners for years (Akimbo anyone?) and they've all proven to be total failures. There is a business model to be said for selling content a la carte, but without the tuner attached, it really diminishes the value of the iTV. If Apple adds a tuner to the device, then it increases demand (and potentiall what they can charge) and still allows them to sell content a la carte for subscribers who may not want to pay for cable.

I'm not saying that I necessarily think the rumor is true, Apple could very well just launch their own PVR without any support from TiVo afterall, but I do think that your reasons for why this rumor isn't true are a little off target. Considering that Apple brought in over $4.8 billion alone in the last three months, I don't think that they'd water down their living room product for a video initive that will never contribute more then a small percentage to their bottom line. Of course I've been saying that Apple would launch a PVR for years, so it tells you how much I know when it comes to Apple.

Posted at 4:07PM on Dec 6th 2006 by Davis Freeberg

3. License? I'd rather see Apple (in conjunction with Google) buy TiVo.

To argue that Apple won't buy TiVo because it is only interested in selling videos is rather ignorant thinking. Did Apple cripple MP3 playback through the iPod and iTunes once they started selling music? Nope. Same thing here.

If Apple believes adding DVR capabilities to their product line will increase Mac and iPod sales, then it would be in their best interest to enable those features.

I myself would prefer to see a Mac Mini with CableCard compatibility become the basis of a TiVo Series 3.5 (or 4) than expensive and underperforming customized hardware.

Posted at 4:13PM on Dec 6th 2006 by The Jeremy

4. Hmmm,

Some intersting points Davis, thanks!

Regarding TiVo not being able to license the EPG because it belongs to TV Guide:

Firstly TV Guide (GemStar) will only license a subset of the whole EPG system, that means some of it will be from TV Guide and some will be owned by TiVo, some possibly by others. Atleast that's how I think it works, I could be wrong. Therefore I think TiVo will own atleast part of the EPG and can license that to Apple.

Secondly if the Apple iTV does not have a tuner it won't have a true EPG because it won't have a programming schedule to guide users through, more a download library. What I'm talking about is the TiVo user interface as a whole. Apple might want/need some of those features.

I'm still not entirely convinced the Apple iTV will be a PVR, although you do put up a good argument why they should make one.

Apple's overall profit margin is 10% which suggests to me the 10c a song they make on iTunes is not that bad afterall.

Also they own most of the music download market which is growing all the time, I'm sure they want to do this with video too.

The branding power of iTunes is huge and will keep users coming back to Apple products. Also once people get used to using iTunes its likely they will do so for a long long time.

It is a difficult one but if I had to go with one or the other (PVR or no PVR) I do think that the iTV will just be an advanced Media Extender. It doesn't sound that exciting to you and me but I'm pretty sure there is a huge demand for linking a computer to a TV but its a daunting task for the average joe. If Apple do it right and make it extremely easy then people will love it. Many people found getting music onto an MP3 player difficult until Apple helped them out.

Posted at 4:33PM on Dec 6th 2006 by Chris Tew

5. I agree that it is highly unlikely that Apple will license the TiVo software.

Licensing patent rights - that I can see, it's been done before. If they're going to do anything that might step on TiVo's patents, Apple is the kind of company that would just license them up front to avoid any trouble. It is a small price overall.

Posted at 7:26PM on Dec 6th 2006 by MegaZone

6. Well, let's see. . . Tivo has been dragging its heels coming out with the (LONG promised) Mac version of Tivo-To-Go. Meanwhile, hackers have finally broken Tivo's DRM, making it a short wait until a full-fledged GUI allows TTG transfers to the Mac.

As I see it, Tivo now has a STRONG reason to work with Apple in order to allow full TTG transfers ASAP. Apple, I'm sure, would LOVE to have TTG transfers play on their iTV product since this would give them access to an existing user base. Tivo also would love to have some 'Apple Mojo' since their stock's in the toilet due to LOTS of competition from cable/satellite DVRs and HTPC.

Better yet, if iTV is the ONLY device which can transfer and play HD content from the new Series 3, it would be a win-win situation. Tivo may finally start to sell some of their new (overpriced) units AND nearly everyone with a series 3 would WANT an iTV for MRV so they wouldn't have to shell out another $1000.00 for another series 3.

Just speculating here, but that is what I would do if I were making the call. . .

Posted at 9:16AM on Dec 7th 2006 by ned bulous