Wednesday, January 19, 2005

Tivo+Netflix partnership update

I gleaned the following insights from this Forbes article.

Tivo is all about the device, the digital video recorder, that you can use to obtain content, TV, movies, photos, from just about anywhere. Netflix is all about providing content, regardless of method of delivery. Nothing's happening with content right now, because Hollywood is still holding tight to it, reluctant to broadcast it in such a way that they lose possession of it.

Once Hollywood gets comfortable with the idea, Tivo will use Netflix as a content provider, and Netflix will use Tivo as a content delivery method.

In the future, content and delivery will be divorced. It won't matter what device you use (phone, computer, TV, DVR, mailbox), you'll be able to get the same content from anywhere (broadcast, satellite, cable, Internet, mail). Both Netflix and Tivo are in the process of building a brand, so when you think devices, you'll think Tivo, and when you think content, you'll think Netflix. Like Apple is now selling more iPods than computers, it doesn't matter what product they sell, as long as it has the Apple brand.

What is Apple like?:
-good at making things simple to use (Netflix, Tivo)
-innovative (Netflix, Tivo)
-makes killer products (Tivo)
-has loyal fans willing to pay a premium (Netflix, Tivo)
-uses proprietary software (Netflix, Tivo)
-is in competition with Microsoft (Tivo)


  1. The comparison to Apple breaks down with the idea that selling iPods is as good as selling Macs. Selling iPods is fractionally as good, because the margin on an iPod is much smaller than the margin on a Mac. Selling lots of iPods is good, but the vast bulk of Apple's actual revenue comes from selling Macs. Selling Macs funds everything else, and without that backbone, Apple would be a very small company, iPods or no.

    I love Tivo to death but they're in a hell of a spot. Their business model looks a lot more like selling iPods than selling Macs, and Apple sells about as many iPods in two weeks as Tivo sells Tivo-boxes in a quarter.

  2. I've heard the opposite, that the bulk of Apple's revenue comes from selling iPods, not Macs.