Wondering Why TiVo Can Sell Its CableCARD DVRs for $300 and Windows OEMs Can’t?

By | October 5th, 2007 comments icon (4) Comments


tivo hd dvr sharp savvy sweet graphic

I am too. This is more of an exercise in thinking out loud than a post on the details of why. Seriously, you can buy a full-featured TiVo HD DVR for about the same price next-generation Vista Media Center Extenders are going to sell for alone. What gives? We were told that the astronomical prices on CableCARD ready PCs (around $3,000 on average) were due to Cable Labs costly and rigorous certification process, but then you get a product like TiVo HD DVR for $299 and something starts to smell fishy. Not only fishy to the consumer, but to the OEMs who were raked over the coals to certify their products.

The only thing I can think of is that TiVo’s box is completely locked down and only uses parts that give it just enough horsepower to process and output HD video, which pleases Cable Labs and keeps the cost down. I get it (at least I think I do). But if that’s the case, that’s still a big price discrepancy in CableCARD ready system offerings.

I’m wondering why doesn’t Microsoft and its partners capitalize on this and develop a similar no-frills system? Does it just not fit into their plan of one server PC with multiple extenders?

Related:
Digital Media Thoughts [10/22/07] – ATI’s CableCard Digital TV Tuner: WTF?





Filed in: Industry Buzz

  • Davis Freeberg

    I think that TiVo is selling their box at or below costs and then making their profits on the guide data. Before they were charging $300 for a lifetime subscription, so really the question is how can TiVo sell a TiVo 3 at $600, when Microsoft can’t get one under $2,000?

    I think part of the cost has to do with the actual certification process, but I also believe that Cablelabs is trying to slow down the deployment of cablecard units and have made it a time intensive process in order to bring one to market. Because HDTV is the future for TiVo, they had no choice but to get the certification and bring their DVR to market, but I could see why a lot of smaller computer makers (or even bigger ones) might want to take a pass on supporting the technology, if it means that they have to wait an extra year to bring their technology to market. If you could get cable lab certification and then update the various components after it came out of the lab, it’d probably be more popular, but if you are having to run yesterday’s technology, in order to get the future of cable, then it’s a powerful disincentive for businesses to simply ignore this fringe market.

    Cable was able to neuter cablecards from the start and while they continue to complain about creating fair playing field for everyone, they also continue to take steps to restrict the technology. Ten years after the cablecard rules were put into effect, we still haven’t realized the potential that they could have had.

  • Andrew McLaughlin

    CableCards are a sham and are nothing but a shill / red herring. OCAP is what Cablelabs and the industry would prefer and they don’t even really prefer that issue. They make a huge amount of money on the cablebox rentals and the premiums for DVR service. They don’t want to lost that revenue. Cable is in for a major disruption in the next 5 years due to the likes of Joost and other yet to be determined business models. How long before live TV is flatout hijacked and distributed over the internet P2P style.

    But I’m off topic. I think Tivo spent more than 3 years kissing CableLabs tail to get certified. Personally, I don’t understand how Sling gets purchased and Tivo is standalone? Why doesn’t Cisco buy them, or Digeo? $800M market cap? Seems cheap to me.

  • http://www.alexandergrundner.com Alexander Grundner

    Here’s a new related link that I’m adding to the original post: ATI’s CableCard Digital TV Tuner: WTF?

  • http://www.alexandergrundner.com Alexander Grundner

    And another related link: Engadget – Sony selling the ATI TV Wonder CableCARD tuner all by its lonesome. Note the price of a single CableCard Tuner is $299, but will not work on a Vista PC that’s not Cable Labs certified.