Are TiVo's Days coming to an end?

His first argument that Moore's Law == convergence of PVR/digital receivers doesn't hold much water, as TiVo doesn't make its money off of the boxes themselves -- it's more like a Sprint PCS is to cellphones.

His second argument doesn't make much sense either. HDTV isn't here yet for most consumers, and as such it doesn't really matter that TiVo hasn't released their HDTV PVR yet. The price is extraordinarily steep, but so is a normal HD receiver ($300+).

I won't address argument three directly, as it really, all his arguments are just indirect ways of the author trying to argue "others will come out with PVRs, and when they do TiVo will lose."

Now, I'm not arguing that TiVo won't lose. What I will say is this. It's more appropriate to view TiVo like Windows CE or the Symbian OS for cellphones (the comparison isn't perfect as TiVo does have monthly fees). Microsoft makes money on CE, as does Symbian, and neither is facing much pressure from the companies they are selling to.

Now, those are more stable markets. In TiVo's case, there are cable companies trying to displace them. Most notably, I think, is AOL/Time Warner, and perhaps DishTV. However, I think Time Warner is trying to displace TiVo because their AOL merger has done little to expand the reach of their entertainment content. A PVR is a way for them to get back on the boat and have a platform from which they can sell on-demand movies into the home. Personally, I think this is stupid, because it limits the reach of their properties to their own cable subscribers. What would make a whole lot more sense, is to have TiVo/ReplayTV integrate on-demand movies into their OS, and suddenly have a platform from which they could reach many more subscribers (assuming that Internet connections are integrated into future TiVos). However, Time Warner probably has a case of "Not Invented Here" syndrome.

TiVo does have an extraordinarily high consumer satisfaction, and in the end cable companies, frustrated by the anemic response to their own offerings, may finally breakdown and realize that they have better opportunities and channels for their offerings other than owning the box itself. However, TiVo will have to do its part and figure out its business model in relation to its monthly service fee, which is certainly a sticking point with cable and satellite providers.