Nyquist Capital

Davis Freeburg, the best Tivo (TIVO) blogger on the planet, has a thoughtful post at Thomas Hawk’s website. He draws parallels between the advertising ‘upfront’ media buys and where Tivo is eventually heading.

All and all it is interesting watching TiVo as the vanguard of where advertising is headed on your television. Advertising, ironically enough for an ad zapper, is probably more important to TiVo than just about anything for them right now. While TiVo makes far more money from a standalone subscriber, the explosion of TiVo users in the years ahead are more likely to come from the major cable deals that they are striking with folks like Comcast (and many more surely to come shortly). In these deals TiVo makes much less money per subscriber but is entitled to valuable advertising revenue from a far greater audience.

Davis appears to be of the opinion that Tivo can have it’s cake and eat it too - win big deals with companies like Comcast while extracting ad revenue bundled with broadband content distribution.

I’ve written before that Tivo needs to bet the company - either they are a provider of OS software for set-top boxed or they are an end run around traditional media broadcasting by providing a new broadband media distribution platform. In one scenario the cable companies/ telcos are your customer. In the other they are the competitor. There is no middle road.

There is simply no way Comcast and other content carriers will allow their distribution network to be undermined by Tivo and I doubt that Tivo will be allowed to gather ad revenue or distribute content when used in conjunction with Comcast subscribers.

Tivo, it’s time to pick. Here is some advice.

Robert Frost - The Road Not Taken -1920

TWO roads diverged in a yellow wood,
And sorry I could not travel both
And be one traveler, long I stood
And looked down one as far as I could
To where it bent in the undergrowth;

Then took the other, as just as fair,
And having perhaps the better claim,
Because it was grassy and wanted wear;
Though as for that the passing there
Had worn them really about the same,

And both that morning equally lay
In leaves no step had trodden black.
Oh, I kept the first for another day!
Yet knowing how way leads on to way,
I doubted if I should ever come back.

I shall be telling this with a sigh
Somewhere ages and ages hence:
Two roads diverged in a wood, and I—
I took the one less traveled by,
And that has made all the difference.