TiVo CEO: Telcos could miss OTT opportunity

CHICAGO – Telecom service providers have a real opportunity to shape the television consumption experience, but they are in danger of missing it, Tom Rogers, president and CEO of TiVo, told SuperCOMM attendees in his Keynote presentation. T iVo is using the conference to talk with telcos about potential partnerships that merge their linear TV with its popular digital video recorder (DVR) services, a combination that today is highly underdeveloped, he said.

“The telecom industry is providing a critical connection of broadband to the home, one of really two choices out there for broadband access, and with video delivery being increasingly what consumers are most valuing about that broadband connection, the industry is really taking no role in shaping the consumption experience,” Rogers, who got his start in the telecom industry, told Keynote attendees. “The involvement with TV for the most part, except for a few leading telcos, is reselling someone else’s TV service while the broadband world is growing dramatically and the connections are growing by virtue of what the industry is selling.”

TiVo already has licensing agreements with cable company Comcast and leading satellite provider DirecTV in place, and Rogers said it is open to working with others. The problem for the telephone industry is that most are not comfortable with their role for consumption, Rogers said. Sitting idly as the opportunity goes by, however, will only lead to disintermediation by over-the-top (OTT) vendors that are looking to stake their claim. The more tightly a carrier wants to integrate with TiVo, the better. Rogers is open to customizing the TiVo service to give it the look and feel of local TV, the same marketing efforts and perhaps even enabling billing by the carrier, depending on their size and needs.

“I’m also struck by the cable industry’s lack of taking this opportunity, which is what in fact creates the opportunity for the people in this room,” Rogers said. “You have cable as the largest deliverer of cable service to the home across the country, the largest provider of broadband to the home. They package them together in a way that customers find attractive, but they stop short of providing the service that’s desirable to consumers. It’s only a tiny fraction of the capability if you really take the power of broadband connected to the TV.”

DVR services are an important competitive service for any pay TV provider, but a partnering with telcos could be equally beneficial to TiVo. The set-top box maker paved the path for DVR, but even as the service has grown in popularity, it has also struggled to maintain its market leadership in the face of generic DVR alternatives and free online sites. TiVo has been signing new partners, including Blockbuster for on-demand video rentals on TiVo’s line of DVR boxes, as well doling out lawsuits against companies, including satellite provider Dish Networks and telcos AT&T and Verizon, that have gotten too close to its DVR Patents.

In total, Rogers said that TiVo is now delivering more than five million pieces of content, including Amazon, Netflix, Blockbuster, YouTube and “every song ever written,” beyond traditional cable content to the TV. The future is all about joining the HD linear TV experience with OTT content to create a true value-added service for subscribers, but that experience has to be on the TV, where consumption is significantly better than the PC, he said. Consumers will be the ones to decide what they want to watch and when.

“Google had to be developed because the Internet was too hard to be tamed, Rogers said. “We view TiVo in the same way; it’s sometimes been characterized as the Google of TV. There is so much out there – content is not an issue – it’s how do you quickly and easily get to what you want to find?...There is a role for telcos to be involved with local provisioning of content.”

Rogers noted that most people who watch TV also have some kind of mobile phone in their pocket or next to them on the couch, and the two experiences – the command and control functions of mobile in particular – are increasingly being tied together. For example, TiVo has already signed on with Research in Motion’s line of BlackBerry smartphones for a free application that will let users of both control their TiVos from their mobile phones. This represents still another opportunity for telcos who already own that wireless relationship.

“Whoever gets to the home first will be the ones to grab this opportunity and develop it…I can’t, for the life of me, understand why the telecom industry, at least those that aren’t developing their own cable-type service, aren’t aggressively trying to figure out how to get in this market,” Rogers said.