Whatever happened to TiVo?

When TiVo was introduced at the January 1999 Consumer Electronic Show, it made a huge splash. Reporters and consumers alike were intensely interested in this revolutionary device.

After the launch, TiVo geared up with a huge marketing campaign, focused mainly on advertising. In 2000, Forrester Research predicted 34 million people would have a DVR by 2004.

The reality is that TiVo has only recently hit the one million subscribers mark, a far cry from the hype and predictions.

So what happened?

Truly revolutionary ideas do not become accepted overnight. It takes time to put a new idea into minds. Red Bull, Starbucks, Wal-Mart, Gatorade. All of these and many more new brands took a long time to get established.

Look at the annual sales for Red Bull:
1987: $1 million
1989: $2 million
1991: $10 million
1993: $24 million
1995: $88 million
1997: $137 million
1999: $451 million
2001: $895 million
Today: Over $1.5 billion

The biggest mistake when introducing a revolutionary new brand is spending heavily on advertising during the launch phase. (Depending on how revolutionary the new idea is the launch phase can last anywhere between one to eight years or longer.) The thinking is: “If we just tell people about our product they will be so blown away they will rush out to buy it.”

Wrong.

TiVo made this mistake and blew millions of dollars on advertising early on, when people were not yet ready or able to accept its brand message.

The more revolutionary the product, the less likely consumers will be to rush out and buy it. Brand building takes time. Brands need to penetrate the mind. The best way to get into a mind is with word of mouth. And the best way to generate word of mouth is with PR.

Tivo has received 5 years of terrific PR. And in my opinion, it was primarily the PR that built the TiVo brand. TiVo has become part of the vocabulary for any self-respecting television watcher. Now is the time to hammer away with a massive advertising program to greatly increase TiVo’s subscriber base. Now is the tipping point for TiVo. Too bad they wasted their advertising dollars upfront, when now is the time to be spending big.

Today, TiVo announced a $15 million dollar campaign. Not nearly enough.

I must say one more thing, I have two TiVos. I love TiVo. TiVo has changed my life.

I just hope TiVo can survive despite its high hopes, fanatical following and my love.

Comments

[Olof Winberg]

I think this TiVo thing looks like a classic "chasm theory" problem, i.e. the problems of making the product diffuse beyond lead-users.

Read Geoffrey Moore's book if you're interested in marketing of hi-tech products...

[john]

If you need to "see it to believe it", why not try infomercials?

There are certain products that just don't sell well, unless you can see them in action. The TV is the perfect medium for conveying these sorts of messages... and ironically for the commercial-skipping TiVo, an informercial could get the idea across effortlessly.

Combine the offer with a money-back guarantee and financing on the purchase, and they just might have a chance.

[Rich Westerfield]

Sorry, URL for Louderback article referenced above(the HTML didn't take for some reason)

http://www.pcmag.com/article2/0%2C1759%2C1550785%2C00.asp

[Rich Westerfield]

Seems the word TiVO owns is actually "TiVO". It has become a verb, as in "I'm going to TiVO this." Even if you're performing that action on a non-TiVO brand.

TiVO blew it not by its advertising, but by its deal-making and in-store demos. Willing consumers couldn't play with it and try out the features. And then once it became "hot", you had to go to BestBuy because they had an exclusive on the standalones. And while TiVO's deal with DirectTV is working out well, that's the only broadband/satellite service that will bother to touch them.

Unfortunately, TiVO could be dead very shortly with cable companies offering the same features. Jim Louderback explains why.

[Joe]

Um, what they said. I just wanted to say that chick leaning on the chair on the top of this site is hot. Anyone know if there's a link to any nasty pics of her?

[Laura]

Scott and Jane you have both said it exactly. TiVo has failed to articulate in one word what the device is. What is the word they own?

Once you have a TiVo, you get it, you love it and you want others to buy it. But TiVo needs to put the right words into word-of-mouth circulation.

They don't have much time left with other companies quickly copying the technology. They are the original, the leader and the generic for the category. But they need to get ahead now, before it is too late.

[Jane]

I agree with Scott that TiVo has done a very poor job of explaining to the general public what their devices can do. I've had a TiVo for several years now and I'm a diehard fan, but only two of my friends have purchased them despite my non-stop boosterism.

[Scott Miller]

What's worse is that the Tivo advertisements absolutely failed to communicate the reason to buy the device. The ads always seemed to focused on pausing live TV, which, while nice, is far from the key reason Tivo users love the product.

The fact is that it's difficult to explain in a print ad or TV commercial why Tivo is so cool -- it's almost a pointless task.

Had I been CEO of Tivo, I would have focused on PR 100% (and thus driven word-of-mouth), and made sure every influential writer in the USA got one for free. Everyone who has one loves it, and loves to brag about how it completely changes the way you watch TV, making it so much more enjoyable and productive. But in ways that are often difficult to explain.

I bought a huge amount of Tivo stock about two years ago, simply because I bought and loved the device, and saw that it was becoming the generic word for the category -- a very, very positive sign that Tivo would be the clear leader going forward. It's a pity that Tivo management has fumbled the ball in so many ways, yet Tivo has still done pretty well. There hasn't been a more loved commercial product come along in the last 10 years, as far as I can remember -- maybe the Ipod.

I strongly believe Tivo will still come out on top, but despite management's blundering rather than due to their marketing know-how.