Though this might be one of the fastest-growing fields in technology in regards to consumer electronics, competition is rife as product differentiation seems to be the ideal in every manufacturer’s mind. Despite this cutthroat competition, TiVo has remained unscathed in some areas and thus continues to give this company some monumental advantage. Some of the areas that give TiVo the said advantages over competitors are:
The TiVo DVR has outstanding ease of use that makes it a favorite with customers due to its user interface. Balancing the ease of use and the inclusion of top of edge features has been an elusive goal for many consumer electronics manufacturers. For once TiVo seemed to strike the balance with a lot of ease. And the results? The relative increase in sales figures that set the scale of measure for other DVRs in the market handing the role of the market influencer.
Clean user interface and advanced search capabilities. The realization that the ease of use of a gadget and its ability to simplify some tasks make the selling point of a DVR is an idea well embraced by TiVo. Unlike its competitors, TiVo in partnership with Google is allowing viewers to search and view program scheduling and further offering the season’s offer.
The TiVocast is one of the best selling points that TiVo is making use of. The feature allows users to access video content feed through the main TiVo menu. This aspect has not been achieved by any of the competitors in the market. Broadening the context in which the company operates. In the report, macro trends are to place the company at an advantage over its competitors. Viewers could use the TiVo DVR to access a wide array of video content and interactive services.
TiVo is also able to identify strategic partners such as DirecTV and Comcast and thereby integrate. The most prevalent one was between Comcast and TiVo to give TiVoCast. The feature allows users to access video content feed through the main TiVo menu. This would make a great selling point for TiVo if it could together with its partners integrate it and market it as their strongest point.
Competitive Disadvantages
Though Tivo has a huge market presence in terms of influencing the popular trend in the consumption of DVR products, the company is unable to convert this aspect into market dominance. In the report, it is indicated that the company is the one that determines what is hot in the market but it has a problem in that competitors are able to imitate TiVo’s product and produce replicas though without some of the features and hence are cheaper than TiVo’s. If only the company was able to segment its market so that some of the products are designed for the low-income market then the company would avoid making huge losses and losing prospective markets.
The threat of Shunning by advertisers- According to the report, it is indicated that 50% of households watch recorded programs and 70% of them skipped adverts. To the advertisers, this means that TiVo users are missing out on a majority of their adverts as most of them are not watching them but are skipping them. To the manufacturers, this means that the manufacturers are shunning away from TiVo in the belief that it is a waste of resources as it is not reaching the targeted audience.
The threat of technology- Though the company is moving fast in adopting new technologies the delivery of products is not matching the tastes of consumers.
The threat of convergence of broadband TV and Availability of free music on the internet
Network effects
The company seems to be prone to network effects. How this affects the TiVo is both advantageous and disadvantageous. In being advantageous partnering with other strategic partners is in one way or another paying off. Partnering with Google is bringing more consumers to the fold of TiVo. The networking has also had its drawback in that direct TV sellers are tempted to shun TiVo as it tends to ward away advertisers as a major source of revenue for TV.
Fitting in the home entertainment production chain
Recording of live TV and the changing of the program schedule seems to be the core idea behind TiVo and other DVRs. Its usage in households comes into play in that it is possible with DVR to reprogram your entertainment and work schedule. This is because one chooses when to watch TV by probably recording it while working so that it does not interfere with the working program of any individual
Making a choice for the company
Given the benefit of making a choice for TiVo, I would go for the company standing alone. Though the partnering seems to work out, it is not working out efficiently. TiVo has the right market influence and the market research is fine, so the best way to go forward is for the company to go it alone and invest in heavy marketing. Once the marketing is bringing in the returns, we can bet on the churn rate to remain as it is in the report of less than 1% per month. In such a situation the company will increase its market dominance and profits.