This case is a classic example of exciting high potential technical innovations losing to the general inertia in adoption, primarily due to weak marketing strategies. TiVo being the pioneer in DVRs, were and are poised to capture the entire Television industry. Their weakness in Strategy stems from an imbalance in resource distribution between R&D and Marketing. The theme inferred being, Venture into only those domains in which the organization has considerable expertise and strong management strategy. Technical innovation which is ahead of its time must be released in a phased manner, from general consumer to niche segments, keeping it affordable to the normal consumer. Also, packaging the product and partnerships to completely profit from it is imperative.
The above claims are substantiated and supported by Jim Barton, who said "We were a bit starry-eyed in the early days about DVRs and how everyone would jump on it". TiVo's initial strategy was based on macro bets to develop a new platform of On Demand TV and Digital Video Recorder with the presumption that the consumer will adopt it instantaneously, which led to many smaller bets resulting in lack of direction and high investment. At the outset it was poised to redefine TV viewing experience, the Stand-Alone DVR was an intuitively developed and packaged product, which captured the niche, high income urban segment instantaneously. But TiVo's management missed the opportunity to release lower versions, of the DVR which could be cheaper to purchase, install and subscribe to, thereby effectively limiting their target market, with high unintended consequences. But, TiVo was recognized as technological innovator in the DVR sphere which gave positive branding. TiVo's strategy of being only a "Facilitator" with dependence on MSOs or Cable Operators for content distribution lost them a crucial leverage. TiVo must have transformed its image from a CE producer to a TV/Internet content distributor similar to the...
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