# TiVo to Offer Debt, Partly to Fund Litigation



## orangeboy (Apr 19, 2004)

Wall Street Journal article


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## Fofer (Oct 29, 2000)

What does this mean? Explain it to me like I'm a 4th grader.


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## rlcarr (Jan 18, 2003)

It means that TiVo is going to sell bonds (i.e. take on debt) to raise cash.

"Convertible" means that while they are interest-paying bonds, bondholders will have the right to convert a bond into a specified number of shares of TiVo stock at a particular price (specified in the bond documents). This allows bondholders to share in any TiVo stock price rallies.


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## Johncv (Jun 11, 2002)

Fofer said:


> What does this mean? Explain it to me like I'm a 4th grader.


http://www.msnbc.msn.com/id/41965481

It mean that you can invest your $120 million dollars into notes with interests rates negotiated between you and TiVo. You also will have the option to purchase an additional $18 million dollars of notes. You agree to hold the notes for 16 years. When notes come due you can cash in the notes with interests or have it all converted to TiVo stock. You assume all risk and betting that TiVo will be around in 16 years. Go for it!


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## Fofer (Oct 29, 2000)

rlcarr said:


> It means that TiVo is going to sell bonds (i.e. take on debt) to raise cash.
> 
> "Convertible" means that while they are interest-paying bonds, bondholders will have the right to convert a bond into a specified number of shares of TiVo stock at a particular price (specified in the bond documents). This allows bondholders to share in any TiVo stock price rallies.





Johncv said:


> http://www.msnbc.msn.com/id/41965481
> 
> It mean that you can invest your $120 million dollars into notes with interests rates negotiated between you and TiVo. You also will have the option to purchase an additional $18 million dollars of notes. You agree to hold the notes for 16 years. When notes come due you can cash in the notes with interests or have it all converted to TiVo stock. You assume all risk and betting that TiVo will be around in 16 years. Go for it!


Thanks... but... if a fourth grader can understand any of that, I'm in trouble.


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## MMaleto (Feb 12, 2011)

Just bought mine, maybe I should have gone for the Master Channel DVR!


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## Fofer (Oct 29, 2000)

rlcarr said:


> It means that TiVo is going to sell bonds (i.e. take on debt) to raise cash.
> 
> "Convertible" means that while they are interest-paying bonds, bondholders will have the right to convert a bond into a specified number of shares of TiVo stock at a particular price (specified in the bond documents). This allows bondholders to share in any TiVo stock price rallies.


Okay, but what does this _mean_? It's a bad thing? They're strapped for cash and desperate?


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## orangeboy (Apr 19, 2004)

It was stated during the earnings conference call that the litigation budget was larger. I see this as being an alternative channel for monies, so other departments won't have to cut their budgets.

On a side note, I misread part of the article (towards the bottom) where it stated a trial date of June 5th was set. After re-reading the article, this trial date is for the Echostar vs. TiVo case, set for June 5th, *2012*, and not the TiVo vs. Echostar case, which has been going on for far too long. TiVo vs. Echostar could wind down "at any time".


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## MikeAndrews (Jan 17, 2002)

So Microsoft is suing TiVo on the principle that there is a great mistake in the cosmos that there just cannot be earlier invented technology Microsoft can't steal scott free when they're bigger and will outlast you in court? 

Kinda obvious why TiVo needs the money.


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## aadam101 (Jul 15, 2002)

Fofer said:


> Thanks... but... if a fourth grader can understand any of that, I'm in trouble.


I would like to see the second grade version.


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## Phantom Gremlin (Jun 20, 2002)

aadam101 said:


> I would like to see the second grade version.


The second grade version is that TiVo is hemorrhaging money on their "knitting", aka DVRs, and has been doing so for many years. Their best chance of long term survival is to win a bunch of lawsuits. They are selling debt in order to continue to litigate.

Sorry, but that didn't turn out so well. Most second graders don't understand words like "hemorrhaging". So here's another try:

Back about 13 years ago, TiVo developed a wonderful product that improves the quality of life of millions of people. However, some "evil businessmen" tried to steal TiVo's invention. TiVo is asking other, "good businessmen" to lend money to them so that TiVo can continue to fight the bad guys in court.


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## Series3Sub (Mar 14, 2010)

It has been known and admitted in many past quarterlies that TiVo's litigation costs against Echostar (now Echostar/Dish, although Echostar is indemnifying Dish regarding TiVo) were crushingly onerous and, for a good while, wiped out any profit. Now, TiVo is suing just about everybody else and it comes with an even more burdensome cost--oh, and they are also defendants (even more legal costs) from Echostar/Dish, Microsoft, Motorola . . . did I forget anyone. They are DESPERATE for this raised cash for it would otherwise significantly and negatively affect their operations.

In other words: it is really bad when you have to borrow money because one can't cover litigation costs. Going into debt to cover legal costs is a horrible business move, unless one is TiVo who has no choice but to do so or its curtains. If it were a defendant, they would either settle or sell to the plaintiff and take the money and run. In fact, some plaintiffs use the leverage of a lawsuit to get the defendant to buy their company.

Of course, TiVo has no choice but to bet the farm and sue everyone and make the mad dash to the "only software" model finish line (this is why the Premiere is such a disappointment; they aren't going to be spending big bucks on innovative boxes anymore) before it is too late. As much as I like TiVO, at least the products preceding the Premier, now that the deep pocketed behemoths have sued TiVO, our little TiVo icon is just dying a lot more slowly than anyone thought. The problem is no one wants to buy TiVo, or at least not at what TiVo may be demanding, and they would sell in a nano-second for the right price.


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## samo (Oct 7, 1999)

Phantom Gremlin said:


> The second grade version is that TiVo is hemorrhaging money on their "knitting", aka DVRs, and has been doing so for many years. Their best chance of long term survival is to win a bunch of lawsuits. They are selling debt in order to continue to litigate.
> 
> Sorry, but that didn't turn out so well. Most second graders don't understand words like "hemorrhaging". So here's another try:
> 
> Back about 13 years ago, TiVo developed a wonderful product that improves the quality of life of millions of people. However, some "evil businessmen" tried to steal TiVo's invention. TiVo is asking other, "good businessmen" to lend money to them so that TiVo can continue to fight the bad guys in court.


Simplified 2nd grade version 
TiVo never made a dime seling DVRs or service. For the long time the only way they could make money was printing stock certificates and selling them to suckers. Then they made a bundle of money winning the lawsuit. It was so profitable that they decided to expand this line of products and they want to find investors who are interested in investing in this new product line.


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## CuriousMark (Jan 13, 2005)

Fofer said:


> Okay, but what does this _mean_? It's a bad thing? They're strapped for cash and desperate?


At the cash burn rates Rogers projected their current warchest will run out in a year or two. This borrowed money will keep them solvent for another year. Hopefully that is long enough get another big infusion from Dish lawsuit in order to keep on fighting. Or perhaps long enough that the new deals take hold and the company turns profitable and can self fund the litigation.

I see this being a move to make sure that the company can stay the course and not have to give in due to Dish's success running the clock out.


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## dgh (Jul 24, 2000)

I think the second grade version is: selling stuff hasn't worked out for them, so now they're trying the Gemstar approach to success but the lawyers are too expensive.


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## lrhorer (Aug 31, 2003)

Fofer said:


> Thanks... but... if a fourth grader can understand any of that, I'm in trouble.


Hey, don't knock fourth graders. Fourth grade was the best six years of my life!


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## orangeboy (Apr 19, 2004)

lrhorer said:


> Hey, don't knock fourth graders. Fourth grade was the best six years of my life!


That may be an old joke, but I still laughed at it!


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## ZeoTiVo (Jan 2, 2004)

CuriousMark said:


> At the cash burn rates Rogers projected their current warchest will run out in a year or two. This borrowed money will keep them solvent for another year. Hopefully that is long enough get another big infusion from Dish lawsuit in order to keep on fighting. Or perhaps long enough that the new deals take hold and the company turns profitable and can self fund the litigation.
> 
> I see this being a move to make sure that the company can stay the course and not have to give in due to Dish's success running the clock out.


hey, stop being all calm and rational - you make everyone else look all over dramatic.


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## janry (Jan 2, 2003)

TiVo needs to hire the local TV lawyer that says you don't owe him a thing if he doesn't collect for you.


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## MikeAndrews (Jan 17, 2002)

janry said:


> TiVo needs to hire the local TV lawyer that says you don't owe him a thing if he doesn't collect for you.


They're doing the other TV (scam) deal where you sell your rights to the "settlement" even before the case ends.


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## Johncv (Jun 11, 2002)

Look like TiVo change the offer:

http://www.msnbc.msn.com/id/41984688

Anyone want to try explaining this. Sound like things are going get interesting.
Would be nice if Apple rode in on a white horse.  I dont think everything is doom & gloom. The price of Tivos you know what went up after hours.


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## rifleman69 (Jan 6, 2005)

Johncv said:


> Look like TiVo change the offer:
> 
> http://www.msnbc.msn.com/id/41984688
> 
> ...


Apple would gut the place, do you really want that to happen?


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## ZeoTiVo (Jan 2, 2004)

rifleman69 said:


> Apple would gut the place, do you really want that to happen?


I have never understood the idea of Apple buying TiVo. Apple has no need for a DVR and certainly has developed some viable download to rent or buy tech of their own that seems to give them a decent profit.


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## Phantom Gremlin (Jun 20, 2002)

I think Google should buy TiVo. They've bought countless other companies, what's one more? Their Google TV would be a better product if it had TiVo's technology in it. But since Google TV is in bed with the Antichrist (aka DISH Network), it's not likely to happen.


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## MichaelK (Jan 10, 2002)

ZeoTiVo said:


> I have never understood the idea of Apple buying TiVo. Apple has no need for a DVR and certainly has developed some viable download to rent or buy tech of their own that seems to give them a decent profit.


I'm not saying it's a good idea.

But EVERYONE is struggling to become the tv gateway to the internet and apps.

apple is trying, ms is trying, sony is trying, google is trying, etc etc etc.

For some reason everyone thinks you need to merge the tv to the internet (and now apps) in order to be around in 5 years.

I really thought google would have the power to make it happen- but googletv is pretty much on life support at the moment.

Will be interesting to see IF ANYONE can get a handle on tv and the internet anytime in the next 5 years.

Maybe it's just cable and vod?


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## MikeAndrews (Jan 17, 2002)

Phantom Gremlin said:


> I think Google should buy TiVo. They've bought countless other companies, what's one more? Their Google TV would be a better product if it had TiVo's technology in it. But since Google TV is in bed with the Antichrist (aka DISH Network), it's not likely to happen.


Google could do good things with TiVo's tech and IP. Google knows Linux real good. What they'd have to learn otherwise is getting CableCARD certification and such.

The hurdle being that Google TV runs Android, not Linux.

And Google doesn't want to be in the hardware business.

And the plus side Google would love, love, love to take up the TiVo side of the litigation against Microsoft. It would be very hard to find chairs in Redmond that hadn't gone into hiding.


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## Johncv (Jun 11, 2002)

Apple TV is not selling very well, because people want a DVR in it, here TiVo would fit.


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## Fofer (Oct 29, 2000)

Johncv said:


> Apple TV is not selling very well


Huh? Says who?

http://mashable.com/2010/12/21/apple-tv-sales/


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## ZeoTiVo (Jan 2, 2004)

Johncv said:


> Apple TV is not selling very well, because people want a DVR in it, here TiVo would fit.


yeah, becasue standalone DVRs are selling so well.

Steve Jobs himself has said the 3rd party DVR market is a nightmare he does not want to try and find a business model in.

Face it, Apple would have no interest in TiVo


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## dlfl (Jul 6, 2006)

rifleman69 said:


> Apple would gut the place, do you really want that to happen?


I don't understand why I or any TiVo owner (other than TiVo stockholders) should really care if they did.

See ***this*** for details.

I probably just "don't get" the high flying world of stocks and bonds, but to me TiVo's offering looks like a total sucker bet.


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## BobCamp1 (May 15, 2002)

CuriousMark said:


> At the cash burn rates Rogers projected their current warchest will run out in a year or two. This borrowed money will keep them solvent for another year. Hopefully that is long enough get another big infusion from Dish lawsuit in order to keep on fighting. Or perhaps long enough that the new deals take hold and the company turns profitable and can self fund the litigation.
> 
> I see this being a move to make sure that the company can stay the course and not have to give in due to Dish's success running the clock out.


I agree. There are many ways to raise cash. Selling the company, IPO, investors, loans, etc. Senior notes are another way to go. Many companies have recently have had private offering of senior notes, including American Airlines, Hertz, Windstream, and Eastman Kodak.

Note how all of the companies I listed are not doing well. This is true for any company running out of cash -- Tivo is no different.

It is not uncommon for the deal to change, and for the better. Tivo needs a certain amount of cash. They will continue to sweeten the pot until they get it.

Also, senior notes are usually not the first choice for raising cash (but they aren't the last either). When 2016 comes and the notes are due, they need to pay back these notes. That money can only come from finishing that Dish lawsuit with even bigger judgments against Dish.

So what does this mean? Do not hit the panic button just yet, but keep your hand near it. You may have to push it in a year or two.


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## lillevig (Dec 7, 2010)

Well, if Tivo goes under at least my Series 1 units can be used in dumb VCR mode. Maybe I can add legs to my HD and make the wife an end table.


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## lessd (Jan 23, 2005)

Johncv said:


> Apple TV is not selling very well, because people want a DVR in it, here TiVo would fit.


I saw the apple TV for the first time, and for Netflex its great (that why my cousin got one) as you can search and it is cool looking including the remote.


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## CuriousMark (Jan 13, 2005)

lillevig said:


> Well, if Tivo goes under at least my Series 1 units can be used in dumb VCR mode. Maybe I can add legs to my HD and make the wife an end table.


Your post is about three years early. That is the point of this thread. Also did you notice that in Britain TiVo is allowing an open source community to take over the guide data provision on the Series 1s that are being dropped? If they can do that there, they could do the same here and your HD would still be functional if TiVo were to go under.


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## MikeAndrews (Jan 17, 2002)

CuriousMark said:


> Your post is about three years early. That is the point of this thread. Also did you notice that in Britain TiVo is allowing an open source community to take over the guide data provision on the Series 1s that are being dropped? If they can do that there, they could do the same here and your HD would still be functional if TiVo were to go under.


We had a pledge in the early years from TiVoNnnn that if TiVo went under he/she would give out the keys to open up the tivo functionality and be able to create the program information. Unfortunately that person is one of the long gone original wizards.

(But imagine what fun could be had if the code was opened up! There's enough hardware power in an HD TiVo to make it soar. It's being held back by the thumbs of the third parties.)

I won't be making any more investments in lifetime service.


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## orangeboy (Apr 19, 2004)

CuriousMark said:


> ...Also did you notice that in Britain TiVo is allowing an open source community to take over the guide data provision on the Series 1s that are being dropped? If they can do that there, they could do the same here and your HD would still be functional if TiVo were to go under.


I don't think it's so much TiVo _allowing_ the S1 folks in the UK to roll-their-own Guide Data; TiVo is ending their contract for owners of the S1 boxes, and the Service Agreement is no longer in effect. So I'm thinking RYO Guide Data would no longer be considered theft of service for the small handful of folks that continue to use the TiVo S1 across the pond.


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## ZeoTiVo (Jan 2, 2004)

netringer said:


> We had a pledge in the early years from TiVoNnnn that if TiVo went under he/she would give out the keys


The window was found to be unlocked on Series 2 (most anyway) and the rest of the S2 and S3 models - the window can be jimmied open.


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## CuriousMark (Jan 13, 2005)

orangeboy said:


> I don't think it's so much TiVo _allowing_ the S1 folks in the UK to roll-their-own Guide Data; TiVo is ending their contract for owners of the S1 boxes, and the Service Agreement is no longer in effect. So I'm thinking RYO Guide Data would no longer be considered theft of service for the small handful of folks that continue to use the TiVo S1 across the pond.


True, I was probably oversimplifying. My point is that the same kind of situation is likely to apply if TiVo were to actually go under, rather than sell the service to a creditor who would then keep charging. In either event, the need to turn the DVR into a lamp table is just not going to materialize.


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## Dan203 (Apr 17, 2000)

If TiVo went under then someone would probably continue to provide guide data for it for a few years until the hardware became so out dated that people started moving on to other devices.

Personally, if TiVo ever goes under, I'll probably build a MCE PC with a couple of Ceton cards as my DVR instead. I prefer the TiVo UI to MCE, but MCE isn't bad and it's free.

Dan


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## shwru980r (Jun 22, 2008)

Comcast is a possibility to buy out Tivo if Tivo goes under. They could then offer Tivo as a premium DVR service and raise the monthly subscription fee. They could also eliminate OTA guide data to make it more difficult to cut the cord.


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## Phantom Gremlin (Jun 20, 2002)

netringer said:


> (But imagine what fun could be had if the code was opened up! There's enough hardware power in an HD TiVo to make it soar. It's being held back by the thumbs of the third parties.)


I think the hardware is being held back more by TiVo employed management morons and incompetent programmers than by "third parties". Is it really "third parties" responsible for the lock-ups? Is it really "third parties" responsible for the 10 minute delays when responding to remote input? I could go on with many more examples like that.

Yes, "third parties" are responsible for the absence of some advanced functionality. But the product is now starting to *fail at basic functionality* and that can only be blamed on TiVo itself.

I'd love to hack on the code and help make the hardware "soar". But first the open source community would have to stamp out piles of festering bugs that TiVo has proven itself incapable of eliminating.


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## lillevig (Dec 7, 2010)

CuriousMark said:


> True, I was probably oversimplifying. My point is that the same kind of situation is likely to apply if TiVo were to actually go under, rather than sell the service to a creditor who would then keep charging. In either event, the need to turn the DVR into a lamp table is just not going to materialize.


Well, my backup plan is to turn my old VCR into an end table.


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## SnakeEyes (Dec 26, 2000)

ZeoTiVo said:


> Steve Jobs himself has said the 3rd party DVR market is a nightmare he does not want to try and find a business model in.


Yes but do you also know the last consumer product he said the same thing about?


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## Fofer (Oct 29, 2000)

Blu Ray?

Kindle eBook reader?


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## dlfl (Jul 6, 2006)

SnakeEyes said:


> Yes but do you also know the last consumer product he said the same thing about?





Fofer said:


> Blu Ray?
> 
> Kindle eBook reader?


LOL! A quote from the second link:
"Googles Android platform gets a similar drubbing."
(In case anyone hasn't heard, Android phones are outselling iPhone now.)
I guess even the great Jobs has clay feet!


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## ZeoTiVo (Jan 2, 2004)

SnakeEyes said:


> Yes but do you also know the last consumer product he said the same thing about?


he semi missed on Blu-ray - not really a product versus a format.

Kindle reader - he likely thought, who wants just a reader when you can have an iPad (or whatever he called it in his mind at that point)

both are emerging techs versus the DVR which is pretty well in place.
Also he did not say the DVR was the problem, he stated that the cable companies are entrenched and can compete so easily on price and control access to the content as the problems of a _ 3rd party DVR_


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## SwampDonkey (Sep 4, 2010)

ZeoTiVo said:


> Face it, Apple would have no interest in TiVo


Agreed, but of all the companies mentioned, they probably have the strongest code skill-base to take on the TiVo. Not that it makes it more likely, just that the odds of success would be greater.


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## Dan203 (Apr 17, 2000)

SwampDonkey said:


> Agreed, but of all the companies mentioned, they probably have the strongest code skill-base to take on the TiVo.


I disagree. OSX may be based on Unix, but that doesn't make the Apple guys Linux experts. I think of all the companies mentioned Google has the best "code skill-base" to take over TiVo. They have been entrenched in Linux for years, almost all of their software can be run on Linux and they even developed an entire OS which uses Linux at it's core. (i.e. Android) Plus, unlike Apple, they have no current interest in selling/renting TV shows, so a DVR might actually be something they would be interested in. Although they could probably just as easily roll their own rather then buying up TiVo.

Dan


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## Fofer (Oct 29, 2000)

What Apple brings to the table is an eye for elegant user interface, which (at one time) seemed to separate TiVo from the rest of the DVRs and set top boxes out there.


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## MikeAndrews (Jan 17, 2002)

Fofer said:


> What Apple brings to the table is an eye for elegant user interface, which (at one time) seemed to separate TiVo from the rest of the DVRs and set top boxes out there.


Still does, combined with the absolute best remote control design, which also, of course, rightfully should belong to Microsoft.


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## Dan203 (Apr 17, 2000)

Fofer said:


> What Apple brings to the table is an eye for elegant user interface


True, but I think that's also a reason why they would NOT buy TiVo. Almost all Apple products follow a similar UI aesthetic, which TiVo doesn't match at all. One of the major reasons anyone would buy TiVo is for their IP, including the UI design, so why buy a company like TiVo if you're going to redo the whole UI anyway?

Google doesn't really have a standard design, so I think they could embrace the TiVo UI. Another company previously suggested was Comcast. I think they (or any cable provider) could easily step it and purchase TiVo, and then simply make it a subsidiary without modifying the IP or brand at all.

TiVo still has a decent product. They just need someone to step in and devote enough resources to engineering to get them back on the right track. They've been too caught up in litigation and licensing deals, and they've let the quality of the core product slip through the cracks.

Dan


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## Fofer (Oct 29, 2000)

Dan203, we agree completely.


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## BrettStah (Nov 12, 2000)

The biggest reason for someone like Google to buy Tivo would be to get the patents that Tivo owns.


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## Dan203 (Apr 17, 2000)

I'm not so sure. The patents are valuable, but I think the biggest reason someone would buy TiVo is for it's brand recognition. Especially a cable or DSS provider. If they could claim that they were the exclusive providers of "TiVo" service it might sway a few subs away from the competition. Provided they could dedicate some resources to it and keep "TiVo" as a premium brand.

Dan


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## BrettStah (Nov 12, 2000)

Good point.

As others have mentioned, I think Google would be a good fit - for one thing, the logos could easily be combined:


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## Dan203 (Apr 17, 2000)

Dan


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## shwru980r (Jun 22, 2008)

Dan203 said:


> One of the major reasons anyone would buy TiVo is for their IP, including the UI design, so why buy a company like TiVo if you're going to redo the whole UI anyway?


A large part of Tivo's IP appears to be their proprietary method integrating their software with under powered hardware and achieving acceptable performance at a low cost. With the advances made in computer hardware over the past decade, is this portion of Tivo's IP obsolete?


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## morac (Mar 14, 2003)

shwru980r said:


> A large part of Tivo's IP appears to be their proprietary method integrating their software with under powered hardware and achieving acceptable performance at a low cost. With the advances made in computer hardware over the past decade, is this portion of Tivo's IP obsolete?


Eventually, but until you can get something equivalent to a Windows Media Center for $99, TiVo will still have a place in the market.


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## wjdennen (May 8, 2002)

When fans of a product are debating about what other company should buy the product-maker, it's a sign of trouble.


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## SnakeEyes (Dec 26, 2000)

The post i responded to was talking about not wanting to wade into a mess of a market not just a product. I was referring to the fact that Jobs said that about the cell phone market too.


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## Fofer (Oct 29, 2000)

SnakeEyes said:


> The post i responded to was talking about not wanting to wade into a mess of a market not just a product. I was referring to the fact that Jobs said that about the cell phone market too.


When did he say that, and what precisely did he say? Got any link to back that up?

I don't think Apple (or Steve Jobs) would be interested in buying TiVo at this time. One would think if that was on their radar they'd have done it long ago, before they partnered with so many networks to get their content into the iTunes Store.

But my request stands... I follow Apple news pretty religiously and don't recall Steve Jobs ever dismissing the cell phone market as a viable business for Apple to someday enter.


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## MikeAndrews (Jan 17, 2002)

shwru980r said:


> A large part of Tivo's IP appears to be their proprietary method integrating their software with under powered hardware and achieving acceptable performance at a low cost. With the advances made in computer hardware over the past decade, is this portion of Tivo's IP obsolete?


The timeline and jump to tick. Some the many things that are blatantly obvious once you see how they did it.


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