Parks Associates Blog

Wednesday, February 07, 2007

On this week's episode of "Leave it to TiVo"...

There's a joke in this industry that you can always tell who the pioneers are from the arrows in the back of their back. I recall Peter Lee from The Walt Disney Co. using this phrase at last year's CONNECTIONS conference as he was discussing ABC's moves into online video distribution and how they were getting pushback from some local affiliates. Well, the ABC folks can take some comfort in the data as they bind their wounds. According to Disney's latest earnings information, more than 19 million streams of ABC programs have been requested through, ad retention rates stand around 85%, and CPM numbers for the online videos are 4-5x those of primetime viewers age 18-49.

TiVo is another company that has pushed the envelope with new video distribution, viewing, and business models. From introducing one of the first PVRs to incorporating whole-house DVR capability and the ability for users to transfer shows to portable devices, TiVo's innovations have laid the foundation for many followers. DVRs? Table stakes for television operators. Home networking? Check out Motorola, Scientific-Atlanta (Cisco), Pace, and all of the major set-top box vendors today - they're all pushing whole-house DVR solutions? Linking a PC to the TV to view photos? Look at the Verizon Home Media DVR functionality. Transfer to portable devices? Intel and Motorola are a couple of companies demonstrating fixed-to-portable video handoffs.

Now, comes the news today that TiVo is partnering with the Unbox(tm) service to allow TiVo users to download Amazon's video content directly to a TiVo box. It's not only a nifty-sounding idea (although I'll hold final judgement until I see the quality of the video experience on an actual television set), but for online video, it's an absolute must - removing the barrier between a video download to a PC and viewing it on a TV. In fact, we just wrote about the critical missing element of Internet video direct-to-the-TV in a blog post last week. And, we wrote late last year in our Internet Video: Direct-to-Consumer Services report:

"One inhibitor for the growth of online distribution of movies and TV programs was the low penetration of PC-to-TV connectivity solutions. Most consumers still want to watch long-form videos on their TVs instead of PC monitors but they don’t have solutions. Although the product category of digital media adapter has existed for a few years, sales have been lackluster due to lack of consumer awareness, limited high-quality Internet video content, and technical issues."

So, we're excited to see another bold step taken by TiVo to push an innovative use case to its users. It's a boost for Amazon's online video offering certainly, and we'd expect this to be a model followed closely by the TiVo-wannabees soon.


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