January 12, 2005
Tivo CEO Resigns
Tivo CEO Mike Ramsay announced his resignation today, saying he'll stay as CEO until a successor is found. He'll also stay on as Chairman of the Board. That's going to be the big story of the day for the DVR blogging community for sure, and I'll update this post throughout the day to get other reactions.
Before looking at what other people have written, I wanted to put down my own thoughts on the news. It's clear that when there's a change at the top at this point in Tivo's history, it can't be good news for Tivo. I'm not counting Tivo out yet, but you can only assume there will be major changes ahead for the company.
Tivo is in a bind financially. It needs more revenue growth to stop the bleeding of cash, and it looks like the board can't see it happening with the direction they are taking. MSOs (e.g. cable and satellite operators) are moving in to the DVR space in a big way, and they have some big advantages. If a consumer has an HDTV, the DVRs are significantly cheaper from the MSOs. If you have a set top box, the MSOs also win because the Tivo standalone units can't record one show while watching live tv. Tivo works, looks, and smells better but it's a tough sell for the bulk of consumers that want to try DVR technologies for the first time and are faced between a $5 a month lease or buying a Tivo and paying $12.99 a month.
On the other side of the coin, Microsoft has shown at CES that it's coming from the other direction, focusing on technologies where it can leverage itself as the technology provider to MSO and consumer electronics company. The clear vision of Microsoft is that it wants to be the technological glue between home devices. They've spent a good deal of R&D dollars on DRM (digital rights protection) which MSOs and content creators hold dear, along with a strategy for moving content into the home, around the home, and out to mobile devices. Everything has to play the Microsoft way, but if you are a consumer that doesn't care about the DRM limitations, it's an easy way to ensure compatibility between devices. While TivoToGo is a tactical improvement for Tivo, Microsoft sees this whole web of technology as a strategy to win at home.
The harbinger of what is to come at Tivo will center on who the board picks to replace Ramsay. It will either be a technology innovator like a Steve Jobs, looking for an innovative way out of the Tivo bind, or alternatively, it will be a turnaround guy, looking to make Tivo look better to a potential corporate merger. My bet is that it will be the turnaround guy because that is the safe bet for investors trying to re-coup some of their investments. If the CEO looks like a guy who has hopped from company to company every couple of years, his/her name doesn't strike much of a bell, and he/she looks more like they came from the IRS than from a circus, it's a turnaround guy.
If he owns the Dallas Mavericks, then the pick will be the technology innovator trying to take the Apple road. If I were the Tivo board, I'd have someone flying down to Texas to watch some basketball, drink an overpriced beer, and have a little chat.
Regardless of the direction Tivo takes, I wouldn't be all that concerned that my Tivo will stop receiving it's daily programming updates. I think it will be around in one form or another. The next CEO will be a good clue which form Tivo will take.
Other opinions (updated throughout the day):
TivoBlog.com million dollar question
Thomas Hawk's "About Friggin Time" OpEd
PVRBlog.com's Post (Thanks for the link, Matt!)
TVPredictions.com Post-Prediction Scorecard
The Motley Fool's Advice
Posted on January 12, 2005
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Thomas Hawk, actually sums up what I was thinking: What took the board so long to realize that Mike Ramsey wasn't cutting it? Or in-fact the company's business model hasn't been working. Here is some back of the envelope calculations: total revenues as... [Read More]
Tracked on January 13, 2005 11:03 AM
What is left to be CEO of? Every major TV distributor has it's own DVR. Game over!
Posted by: DH at January 14, 2005 07:15 AM