TiVo or Not TiVo: That Is the Question

TiVo will always have a hard time, because it must interface with a cable company that can make life difficult.

I'm a longtime TiVo aficionado. Its interface is far better than the DVRs offered by the cable companies. And I'm told by people who have seen it that TiVo Inc.'s newest device, the Roamio, is outstanding. I've had a TiVo for a dozen years now. And there's a nice upgrade promotion in my inbox right now.

And yet...

Comcast Corp. , our local cable company, does not play nice with the TiVo we have; we've never gotten the dual tuner to work with its cable card (something I feel may not be entirely coincidental, as Comcast rents DVRs for a nice sum every month). Do I want to plunk down more money to see if we can make it work this time?

More worrying still is the news that TiVo may have just laid off a bunch of hardware engineers. I don't want to plunk down for lifetime service only to discover that the company's lifetime isn't that long. This has been a problem for TiVo ever since cable companies entered its niche and started renting out boxes directly: If you think that the company is imperiled, investing hundreds of dollars in its product may not make sense.

TiVo would not be the first company to innovate only to see an incumbent with complementary assets such as distribution networks sweep in to take all the profits from its idea. You see the pattern over and over, in everything from CT scanners to Web browsers. The topic of when disruptors knock off incumbents -- and when incumbents knock off disruptors -- is a fascinating one, and the debate may never be entirely resolved. But one not-bad rule of thumb is that incumbents tend to win when they have a lot of leverage over an important part of the sales-and-use cycle. So Microsoft Corp. killed Netscape Communications because it controlled the majority of computers on which Netscape's software ran. But Microsoft had no comparable leverage against Google Inc.

If that's true, then absent some government intervention, TiVo is always going to have a hard time, because it needs to interface with a cable company that can make life difficult. Which, in turn, will make people more wary of adopting its boxes in the first place.

Some suggest that TiVo may be getting rid of engineers in preparation for a shift away from direct-to-consumer sales and toward becoming a partner of the telecommunications companies. That would make sense. It would be a sad day, however, for the millions of us who love our TiVos.

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.