Suing For Patent Infringement No Replacement For Actually Building A Real Business
from the more-focus-on-executing,-less-on-suing dept
TiVo has been spending a lot of effort suing others for patent infringement, but apparently not very much on actually improving their own services and giving customers a reason to buy them over the competition. So while it may be winning some of its patent lawsuits, it hasn't helped much for the business, which is rapidly bleeding customers and losing marketshare. TiVo basically created this market and owned it for years -- but then got complacent. Now, since it can't compete, it's gone to a litigation strategy. Perhaps it should have focused more on providing value and competing rather than suing.
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Filed Under: business, dvr, infringement, patents
Companies: tivo
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You can't blame it all on TiVo. Back when nearly everyone watched TV with regular good old fashion analog cable TV, it was easy for TiVo to get into everyone's living room.
But now that most people are using proprietary digital cable and satellite services, TiVo is basically screwed. TiVo can only service people watching TV on those services at the discretion of the carrier. And let's face it, the carrier would rather rent/lease its own product.
With today's proprietary technology, the VCR never would have succeeded because it would have been impossible to sell one that worked in most homes. That's the same problem TiVo faces.
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Incorrect. The Cable Industry adopted a standards-based decryption module called a Cable Card.
The problem is that The Cable Industry also has a huge leasing business built around Cable Boxes. This helps them to show on their books a larger investment in Capital Expenditures, and cash flow based on those CapEx investments. Because of the sheer size of this market, Cable Providers can also negotiate larger discounts on lower-quality, TiVo IP infringing hardware.
Fast Forward to Customer experience, and you'll see that a customer generally isn't excited about buying a $500 piece of hardware when they can lease something from the cable company for $5 a month.
It's possible that TiVo can offer a device for, say $400 wholesale, plus the cost of de-encryption modules, add another $100. Whereas, a company like Motorola can sell a complete device for, say $250 wholesale.
So what's the problem? Possibly the Cable Industry won't license de-encryption technology. This would have the ability to drive down the costs of their DVRs. In response, TiVo sues the companies that create knockoffs using thier DVR IP.
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Another idea may be for Motorola to spin off the STB business and allow TiVo to acquire the CableCard business along with their IP.
To add, MOT wants $4B for their STB business, and TiVo is roughly valued at $1B. Combine the two, this could be a real interesting 3-way merger.
Considering Google's recent interest in providing ads on TiVo, perhaps they would be the marriage partner. Could Google acquire both? If not, they should explore, at minimum, a percentage investment into MOT's set top business, essentially buy out their CableCard manufacturing and all related IP licensing rights. Now that may create a real interesting opportunity.
As I run with the proposed scenario in my mind, it's actually worth exploring much further. Wow. This could be a real sexy opportunity for involved parties.
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Lack of full cable integration/lack of real usable cable integration is what is holding back Tivo. Cablecards are a fine idea but truely poor in practice.
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Much of the problem is also that TiVo is not allowed to have access to the program guide. TiVo's don't really cost more than the DVR's from cable companies but to use the program guide on a TiVo you must hook it up to the Internet and pay them and that's an inconvenience. The DVR's from the cable companies pick up the program guide from the cable lines. This isn't an issue of economies of scale, TiVo would also enjoy economies of scale for their product.
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Yup. That's a problem addressed with CableCard 2.0 which has not been released to production yet.
My suggestion is to write a letter requesting a refund/replacement of your cablecard to:
CableLabs
858 Coal Creek Cir
Louisville, CO 80027
(303) 661-9100
For their bang up job of creating a fantastically field-upgradable standard.
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Even if this is true the problem is still a lack of competition. With competition some other provider would be allowed to compete by offering more non encrypted program guides and programs that TiVo wouldn't need expensive hardware to support.
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Nowadays each provider, Comcast, Charter, Dish, etc, owns its own proprietary infrastructure. The fact that you can choose between multiple proprietary infrastructures does not change the fact that a company such as TiVo is screwed. Even if there are 1000 providers each with its own proprietary infrastructure, TiVo would still be locked out.
But not only is TiVo locked out, so is the next great living room invention. Any hardware manufacturer has to get permission from each and every proprietary TV provider in order to get into everyone's living room.
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Duh
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Re: Duh
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and where do you live?
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the first thing is the 'can't compete'. right, so tivo is having a hard time competing against DVR's that infringe on its patents. this is what patents were made for.
second, have you ever used a tivo? they are still leaps and bounds above any cable DVR system. and with the additions of netflix and amazon are really great set-top boxes.
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No, patents are made to spur progress. Limiting competition is the means by which this is intended to happen, but not the goal.
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No, patents are made to spur progress. Limiting competition is the means by which this is intended to happen, but not the goal.
_
right. Tivo makes new ground by innovation and gets rewarded for that innovation by a patent, which has a limited life span.
the problem here isn't that other DVR's exist. The problme is that the cable companies are providing them heavily subsidized to the users WITH features that infringe on Tivo's patents.
the patent was designed to spur progress by protecting the inventor from having his ideas stolen.
how can a company like Tivo compete with Comcast offering a DVR as a part of the package? most users don't even know that a Tivo will work (if they know what it is). is this competition even fair? it is if the Tivo is a better machine. more people will know/hear/buy the better product. but if they cannot protect the parts that are better with a patent (again, the purpose of the patent) then there is no competition. comcast will just infringe and run the market.
and they probably compete the same way that netscape competed. which means, like I.E., we (the consumer) are going to lose again.
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How:
Don't offer a TiVo-based product to customers.
Don't make a product that is non-infringing on TiVo-based IP available.
Ensure that TiVo can't offer an out-of-the-box product that works 100% without additional hardware.
Amazing how the *real* marketplace works, huh?
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Re: Patents vs Innovation
nasch wrote:
Except that doesn’t work. Innovation is spurred by competition, so naturally limiting competition cannot spur innovation.
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However, invention is not necessarily spurred by competition. Further, as has been noted in multiple posts on this web site, unlimited competition does not necessarily provide for the optimal societal outcome. Note that Mike recently posted an article recently that noted the optimum ratio of of creating to copying/imitating/"innovating" is 7:3. Without intellectual property it is possible that creation will decrease significantly, particularly in the area of invention, which would necessarily lead to less than an optimal ratio of creating/inventin to copying and imitating.
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Re: Patents vs Innovation
However, invention is not necessarily spurred by competition.
Invention is not innovation.
Further, as has been noted in multiple posts on this web site, unlimited competition does not necessarily provide for the optimal societal outcome.
And what “optimal societal outcome” do patents achieve?
Without intellectual property it is possible that creation will decrease significantly, particularly in the area of invention, which would necessarily lead to less than an optimal ratio of creating/inventin to copying and imitating.
Historical evidence shows otherwise. Humans have been creative and inventive throughout their entire history, whereas the concepts of “intellectual property” only date back a few centuries at most.
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Tivo
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Stupid cable companies
I know my cable company will force me 'their' digital box but the advantage of 'knowing' digital electronics I am already hard at work to subvert their money grabbing system. I have a prototype computer that can capture all incoming digital signals and convert them all at once and feed them out on the regular 2-199 channels (some manual channel mapping) while maintaining HDTV visual and audio. That way I do not need no stupid 'box' at a $5 monthly rental charge for each of my 6 TVs (extra for a HD box) and I can also get the computer to act as a DVR and avoid the extra $25 a month my cable company wants for their 100 GB recorder (extra monthly fees for up to 160 GB recorder). In theory it could work with Tivo.
Once that signal is delivered to my house I can do what I please with it - and I will.
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Cold Dead Hands
Not really contributing to the discussion here. Just voicing support for a company that make a fine product.
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I was going to buy a Tivo for christmas
I was going to buy a Tivo for my wife this year. I currently use a linux box as a PVR, but Tivo's nice clean interface would be a good thing for her. However, I could not stomach the monthly charge. Basically, Tivo is charging $12 per month (or is it $12.95?) to provide scheduling. This information is available for free on the Internet. On top of that, Tivo also sells information it collects to advertisers. I would be more likely to buy a Tivo if they charged an extra $150 for their hardware and then provided a free lifetime service. I know they do provide lifetime service for a set fee, but the "lifetime" service exceeds the warranty service on the unit itself.
Heck, they could probably even make money by providing the scheduling service for free to other manufacturers. They could use it as an advertising channel and collect data from a broader group of clients.
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CableCard fiasco killed Tivo
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once you run out of space ....
ugh you twits are stupid
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