InteracTiVoty: Overcoming Obstacles to Broadband Television - Evan Young - MediaBizBlogger

At TiVo, we have been working hard to bring broadband-delivered video to the television for the past several years. The foundation began with our Series2 platform – introduced in 2002, it was one of the first set-top boxes to have broadband capabilities. We started with music, photos, and simple broadband services; we didn't deliver our first piece of broadband video to the television until 2005.

TiVo started out as a digital video recorder, and indeed, DVR is currently the primary function that all of our subscribers use. We still continue to innovate around DVR features for television, but increasingly our attention is turning to broadband-delivered video. Why? Simply put, broadband delivery is the next step in fulfilling the TiVo motto of "watch what you want, when you want." While hard drives grow larger, and there are hundreds of channels in the cable line-up, there's only so much that can be broadcast and only so much that the DVR can hold. The Internet is the best way to deliver everything that a consumer might want, on-demand. And TiVo is implementing the features that will make this possible in the context of television.

However, broadband video on the television is still in its infancy. Most U.S. homes' primary television service comes from a cable or satellite set-top box that is closed to the Internet or independent third-party services. The newest gaming platforms offer movie rentals and television shows, but few users have replaced their cable or satellite with what they can find on XBOX Live or the Playstation Store. People are starting to hook up their computers to their TVs, to watch video from sites like Hulu.com, but more often the video comes from torrents and file-sharing. While this is currently a small population, it is a growing and young population – these are future television viewers, who have learned to avoid paid and commercial television services.

There are a number of barriers to fulfilling the promise of true broadband-delivered television, a combination of business, technology, and user-driven factors:

(1) Rights. While recent movies and TV shows have been licensed for broadband distribution, a vast portion of the older catalog is prevented from legal distribution until the various licensing aspects are worked out.

(2) Broadband speed. The U.S. lags far behind many other developed countries in U.S. home broadband connectivity. If you want full HD 1080P video, even encoded at H.264, you're going to need at least 6 Mbps for the video alone. You want to have 2 people watching separate streams on different TVs? No such luck today.

(3) Search. In a world of infinite choice, how do you find what you want to watch? Is that show I'm looking for on Hulu.com, ABC.com, MySpace, Fancast, or somewhere else? And how do I find new shows?

TiVo can't solve the rights or speed problems by ourselves. But we are already working on the search challenge, with promising results. The new TiVo Search (which we introduced in January) searches across both broadband and broadcast and retail sources to find the show you're looking for. You want to watch it free with commercials? We'll record it for you. You want it without commercials? We'll show you who has it, at what price or subscription. Not available on broadcast or broadband (for window, rights, or other reasons)? We'll show you the options to buy it on DVD from Amazon. You want to find related items on YouTube? We'll point you to those too.

There are many significant hurdles that remain, two of which I will highlight here. One is convincing consumers that there are legitimate, easy, and affordable ways of getting the programming they want (as opposed to stealing it). Anyone who has tried file-sharing and torrenting shows knows that the process is plagued by slow downloads, variable quality, and sometimes the inability to find exactly what you're looking for – but it's free. That's one reason why we feel TiVo Search is so important – because we can show users the highest quality sources, immediately available, of exactly what they are looking for. We make the "free but pirated" model less attractive by comparison.

The second hurdle is proving the business model for broadband-delivered video, especially for advertising-supported content. The economics are much different than television. Many other companies in this space focus on the costs of broadband delivery and the unicast nature that drives up costs in a way that the broadcast medium does not – and there are a lot of interesting P2P and compression technologies that seek to address this problem. At TiVo, we are leaving these solutions to others; we're happy to work with common cost-saving technologies that are becoming the industry standards. We're focused on a different part of the problem – driving the demand and audience for broadband-delivered video. Right now, since the audience is small, most content is best supported by VOD or subscription models. But as audiences increase and behaviors change, advertising will increasingly be an effective means of bringing content to users.

But this is not going to happen overnight, which brings us back to why we believe the integration of the DVR with broadband sources is so vital. The largest audiences watching content on their television are still choosing, well, television sources. The behavior of watching television with a remote control is not going to be replaced anytime soon by a PC with a keyboard or a game controller – but it WILL be replaced over time unless our concept of what comes to TV evolves. Now is the time to strengthen the television experience (live and DVR) by adding broadband content to the mix. Otherwise, if broadband delivered content does not eventually merge with broadcast, they will wind up competing against each other on different platforms – and that's an outcome nobody wants.

Evan Young is Director of Broadband Services at TiVo Inc.