STRATEGIC INFLECTION: TiVo in 2003
TiVo and Digital Video Recorder (DVR) Industry
Since the first time of the new DVR (Digital Video Recorder) industry, TiVo was clearly the leader in this new field. The first commercial broadcast quality video recorder was released Betamax video system by Sony in 1975. Two years later, JVC released the competing standard VHS (Video Home System). JVC formed early alliances with Matshushita Electric which had a large global distribution network. As a result VHS took off and by 1993 Sony was forced to discontinue production of video recorders with Betamax technology. In 1997, TiVo introduce the first DVR models in the US market. TiVo device serves a function similar to a VCR (Video Cassette Recorder), in that both allow a television viewer to record programming for viewing at a later time. TiVo device stores television programs onto hard disk storage. TiVo helped customer solve problems, ¡§due to conflicts¡¨, consumers were sometimes unable to watch their favorite TV shows when they were broadcast and as search engine for cable and satellite TV. Along with many other features, TiVo is going to change the way people relate to home entertainment.
TiVo and the DVR Disruption
Despite TiVo having the strongest brand, the most differentiated product in terms of features and one of the largest installed bases, TiVo facing dilemma about the competition had increased, the cable TV industry was in transition from analog to digital and TiVo had suffered $500 million in operating losses since it was founded. TiVo also have bigger challenges with regard technology platform that TiVo could not be easily adapted to different hardware and software environment. TiVo operated in a complex ecosystem, which required the company to manage a wide array of potential competitors, partners and complementors. The battle between TV Cable and TV Satellite had important implications for TiVo. The TV Cable operators and the TV Satellite company were...
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