Om Malik and PVRBlog, along with Phillip Swann, have an interesting debate on how to save Tivo. Om Malik’s approach is to give away 2M units to build a userbase and create a premium brand. PVRBlog makes the cogent point that Tivo doesn’t have the cash flow required.

I think they both make valid points, and undoubtedly, Tivo has a premium user interface. However, I don’t see Tivo being a premium brand over the next year without better support for HDTV, which by all indications, is where the market is moving.

For all the talk of Tivo being a technology company, they are way behind the curve when it comes to HDTV, and as I’ve questioned in the past, who will want a standard Tivo controlling their television experience if they own a HDTV-ready television? To be fair, they do have a unit that works for their DirecTV subscribers, but as others have said, that relationship is on shaky ground at best.

Compressing analog HDTV streams in real-time is still cost prohibitive, but there are still two technologies that could be used in the interim. The first is building a unit with an extra Over-The-Air HDTV capture card, which isn’t ideal, but gets a foot in the HDTV door (the fact that Tivo doesn’t have a standalone DVR with two capture cards has always been a real head scratcher for me, but that’s another topic). The longer term technology is Cable Card, which eliminates the set-top box altogether.

Without a good HDTV strategy, it’s days as an independent entity are limited. Without some success partnering or building next generation products quickly, Tivo has no HDTV strategy.