The Engadget Interview: Mike Ramsay, CEO of TiVo

Veteran journalist and Engadget correspondent J.D. Lasica cornered TiVO CEO Mike Ramsay in a hallway at the Web 2.0 conference, where the head of the pioneering digital video recorder company talked about TiVo DVD recorders, government meddling in new technologies, and what the future of television holds:

Talk to me about TiVo not as a company, but as an idea. TiVo owners are passionate about their TiVos. Why does the cult of TiVo command such power?

The insider language around this is, Oh my God, we've created a monster. It's apparent we've got this compelling consumer proposition. At the end of the day, it has to do with fact that people are discovering they can be in control of television and, more broadly, can be in control of their home entertainment. It's not until you discover what you can do that you realize how much a slave you were to the old way.

Television has a bad rep, it's kind of broken. When you have 500 channels and there's nothing on, television is definitely broken. I think what TiVo has done is put people back in charge.  And that's a primal, important thing that people like as far as a social trend that's far broader than television. And when you give them that empowerment, they get very excited and love it. And so you get a statement like, 'It's changed my life. I can never go back.' That's a huge motivator for us as a company.

Do you have any favorite stories or testimonials from people about their TiVos?  

We hear all sorts of stories, mostly around kids. The fact you can manage kids' television viewing much more effectively. It doesn't get in the way of the family being able to sit down and have a meal together. That's where the lifestyle thing begins to build. When you're a slave to television it screws up your life.

My car has a TiVo license plate, so I get messages under my windshield wipers, people saying, I love TiVo. We get mail from people who send us the TiVo remote because their dog chewed it and they want a replacement. And we take these and put them in a trophy case. You get this cross-section of humanity and how they interact with their TiVos.

Do you think TiVo is part of a bigger cultural wave of consumer empowerment?

I know people who react that way. The PC revolution empowered people, it gave them a tool to do things on their own creatively. They didn't have to go ask permission of anyone. The Internet gave us access to infinite amounts of customized information. Google is an incredible personalization engine for all the information in the world, essentially. TiVo has been about empowering people to be in charge of their own entertainment choices.  

We've taken that idea developing over the past 10 or 20 years, and I do think it's caused a social change where people expect if they want to do something or change something, they just go and do it. They don't have to wait in line or ask permission. We're extending that idea into the television world. And we're extending it beyond television because of the work we're doing with music and pictures. Our software lets you stream music from your PC to your TiVo to play it on your stereo system, and also the ability to show digital photographs.

What's your vision for Internet television?

For us, it's a natural idea to consider that the DVR idea would be extended beyond broadcast onto broadband. We're in this space today where the availability of content over the Internet is starting to explode, starting with audio content and increasingly going to video content. But there's no real good technology for delivering that to the most ubiquitous UI there is, which is television. We see our role as providing that delivery because we have a television-based platform. It's not a PC, it's not a Web browser, it's a true set-top device. The opportunity we like is the marriage of what TiVo does from a UI standpoint with the availability of content that can be delivered over broadband. Realistically, five years down the road, when you sit down to watch television, a good chunk of it will come over broadband.

Is that why you bought Strangeberry?

We haven't really disclosed the underlying technology that we bought from them, but there are certainly elements of what they're doing that are very important to this. They have a unique technology that marries the Internet world to the television world, and we saw that as extremely valuable. We're integrating that into our core products today.

A high-definition TiVo recently came to market. How is that selling?

It's a DirecTV product with a high-def version of TiVo. I have one at home, it works great. We're believers in high def, and I think we'll see increasing demand for high-def standalone products. So far, they cannot make enough of them. It's an incredibly popular product.

Will we see TiVo on other kinds of consumer devices in the future?

Well, today one of the exciting things is the marriage of DVD recorders and TiVo. Pioneer already has one on the market. Both Toshiba and Humax are going to be delivering DVD recorders within the next 30 to 60 days. You can do everything with one remote control: You can play back DVDs, CDs, you can do your TiVo thing or change channels on your television. You can record anything from television onto the DVD. So it's very useful, and we'll see a much more rapid proliferation of DVD recorders than we've seen to date because the user interface and the TiVo nature of them will be more appealing.

I've got two TiVos and a DVD recorder already. What will TiVo on a DVD recorder add to the mix?

Oh, it's a whole new cool thing. TiVo's got Now Playing listing all your programs, and you say, I'm traveling to New York by plane, so I'll check the ones I want to watch and it'll record those to DVD automatically. You get the DVD, put it in your laptop, and it's got the TiVo UI on it. So it's a trivially simple and powerful way to create a portable version of TiVo.

Tell me about TiVoToGo, the service that allows TiVo users to send programs to as many as 10 TiVo units with the same customer account in a secure fashion.

Right. We've established a technology that will allow people to share programs, albeit in a limited sphere like iTunes, among a community on the same network. We think that will largely be used for people to transfer TV programs onto a laptop so you can take them with you. Getting it out there onto these portable devices like laptops and video players is something consumers really want to do.
 
We developed a security mechanism around that, submitted it to the FCC under the broadcast flag initiative, and the Motion Picture Association and the NFL went ballistic and lobbied incredibly hard. But guess what? It got approved. The FCC supported our technology.  

Should the FCC be in the business of regulating new technologies like this one?

Definitely not. It's scary when you feel that you have to go to the FCC for permission to do something. So we're not very comfortable with that. I think the broadcast flag stuff is less onerous than some other things, like the INDUCE Act. That we're much more concerned with because that could lead to prosecution of individuals who induce copyright infringement. That just opens up a whole can of worms. If you upset consumers enough, they'll become pirates, and that law has the potential to do that.

You'll notice that everything on the table in Washington being pushed by the media companies doesn't target regular television. It's targeted at things like ripping DVDs, how long you can keep movies pay-per-view movies, and so on.

Tell me about the new deal with Netflix.

It's about video rental. Most people these days, at least in this community, are buying music electronically. They're not buying physical media. And I think the same thing will happen with video. Instead of going to the video store or getting your Netflix in the mail, it's going to show up in your TiVo. It's a natural. It doesn't matter if it takes a day to get there, because Netflix takes a day anyway. People will get used to having a pipeline where content drips through. The transition to electronic distribution will be complete and we won't be dealing with physical media.

So you'll be competing with services like Movielink and CinemaNow?

Not really. Netflix will be a download, and those other services are streaming. All broadband Internet distribution will be a download for the foreseeable future. Streaming offers less than television quality. We believe that everything you deliver to the television has to be TV quality or better—you can't compromise on that. The only way you can do that in the U.S. today is by download.

How do you navigate the tricky path of pleasing the cable companies, the content companies and your customers?

There's a lot we'd like to do. It's hard to stop innovation, and you could argue that a lot of the restrictive practices to inhibit innovation have actually stirred innovation. File sharing and the DVR may not have occurred were it not for the fact people were frustrated about getting access to music or their favorite TV program.

Looking ahead, we have a big interest in broadband and the distribution of television broadcast by satellite or cable. What happens when you can make broadband work with that? The implications for the industry are immense.

But the cable companies would oppose losing their stranglehold over the pipes into the living room, wouldn't they?

Nobody can stop us. You do the deals and you get distribution. You don't have to get carriage in the traditional sense. Anyone can buy bandwidth and deliver their content, and that will have a large impact on the cable and satellite industry over the next 10 years.

How are you negotiating your relationship with Hollywood after they essentially put your main competitor out of business?

Our role is to create a great experience for people who want to watch television. ReplayTV crossed a line, and they kind of asked for it, and they were put out of business. There is a business objective we have as a company to have a certain level of support from the industry because that's good for our business. If you get stupid and you go out of business, that isn't doing the consumer any good.

Where do you see the television landscape five or ten years down the road?

High definition will become more commonplace. Five years from now, you'll be able to get television content over broadband, whether it's over satellite or cable, and it will be the start of some new and interesting sources of content which has not been available to people to date. And five years from now, the idea of electronic delivery of video rentals will be real. Blockbuster will still be in business, but the idea of getting your video rental over broadband will have started to happen.

---

J.D. Lasica is the author of the upcoming book Darknet: Remixing the Future of Entertainment.

[Mike @ Dec 19th 2005 12:05AM]

I'm surprised he was willing to say as much as he did.

The big questions I have is why is Netflix putting the future of the company into downloads that require a TiVo box? What secret plan do they have? What will they do that MovieLink can't do now?

The whole Strangeberry secret is interesting too...

- Mike
www.HackingNetflix.com

[Jason @ Dec 19th 2005 12:05AM]

I don't quite get why the dog-chewed TiVo remote becomes a trophy.

[wardude @ Dec 19th 2005 12:05AM]

You missed the most crtitcal question to ask. When will Tivo support a CableCARD based unit. Multiple CableCARD per Unit would be really nice also. (FYI This would allow, by law, a Tivo to access digital cable stations, cable Pay TV, and cable HDTV signals.

[Jeremiah Owen @ Dec 19th 2005 12:05AM]

Wish there was a solid date for Tivo To Go... the wait is driving me nuts!

[nike @ Dec 19th 2005 12:05AM]

Cinemanow and movielink are indeed DOWNLOAD services, just like the Netflix service will be. They do download complete movies to a harddrive, or HTPC. I certainly hope Mr. Ramsey has a handle on that.

[Jonathan Napier @ Dec 19th 2005 12:05AM]

keep it up lads

[Alex @ Dec 19th 2005 12:05AM]

I too can't wait for TiVoToGo..... When will TiVoToGo be released! Please give us more info :).

Alex
http://www.tivoblog.com

[Bill Moore @ Dec 19th 2005 12:05AM]

Mr. Ramsey does a great job explaining how TiVo has opended the box and consumers won't go back. We are trying the same for radio at www.radiotime.com.

[u07ch @ Dec 19th 2005 12:05AM]

After 5 years my tivo died yesterday; its not economic to repair and theres no replacement for it in the UK anymore. First we lose concorde now tivo thats progress for you *sobs* as he switches to sky digital

[D H @ Dec 19th 2005 12:05AM]

The comment about ReplayTV being put out of business is false. DNNA owns them now and my Panasonic Showstopper and newly purchased (brand new in box from a retail store) ReplayTV 5504 both work just dandy. Typical Hollywood kiss-a$$ telling lies to further their agenda.

[Ben @ Dec 19th 2005 12:05AM]

I agree, why didn't he expound on more about the HD market for standalone and cablecard tivo??? This is a stranglehold that all the cable companies have and getting a TiVo into this market is VERY exciting.

[Chris @ Dec 19th 2005 12:05AM]

Great job. An interesting read about a man who has changed TV forever.

[Tony M. Brown @ Dec 19th 2005 12:05AM]

Last time I checked, ReplayTV wasn't dead. In fact, Digital Networks North America just released the 5500-series around the same time the TiVo Series 2 came out and it still has all of the same features it originally had, minus IVS and automatic Commercial Skip.

[Hong Cho @ Dec 19th 2005 12:05AM]

The interviewer should have asked more challenging questions.

About half of their revenue comes from DirecTV and this deal will end in 2007. News Corp. which owns DirecTV also owns NDS which also makes TiVo's competition.

It is very likely that, even if TiVo renews its contract with DirecTV, DirecTV will also introduce the NDS DVR (probably without any DVR fee) along with the TiVo STB. This will heavily dent their bottom line.

What has TiVo done to get a deal for a cable company (such as Comcast)? As far as I know, Comcast is going with other DVR software manufacturers (e.g., iGuide, Moxi, MSTV FE, etc.).

And TiVo does not have the patent on name-based recording; ReplayTV does. TiVo does have a patent on "Season Pass", but some of their competitors (Moxi and MSTV FE, at least) have already come out an alternative. I doubt TiVo can depend on the patent system alone to survive.

[Will Collier @ Dec 19th 2005 12:05AM]

Ditto on the ReplayTV comments. Lame of you to let him get away with saying they're "out of business." I use my two 5000-series Replays to record and move content around all the time; DVD burning, direct dumps to my laptop hard drive for travel, IVS sharing, commercial-skipping and editing, you name it. And I don't have to pay anybody a dime for "permission" to do so, much less an extra subscription fee to enable the technology that I've already paid for.

Bite me, MPAA, and Tivo too!

[Xueilonox @ Dec 19th 2005 12:05AM]

I wondered about a cable deal as well. I made an entry in my blog arguing that they may not need one. Only time will tell.

Great job with the interview.

Michael (aka, Xueilonox)
digitalmerging.la

[Thomas Hawk @ Dec 19th 2005 12:05AM]

Great work JD, and Peter great work on publishing these interviews by JD.

Mike is right on so many different levels. Broadband content delivery will become extremely important... not just for television and hit movies but by turning 500 channels into 500,000 channels.

The opportunity in the fragmented content world that includes everything beneath the current 500 cable/satellite channels (the tail, as it has become the recent catch phrase) is a huge collective market. Both Microsoft and TiVo would be wise to address this market and be the first to offer this content via their living room devices.

A print ad you might see in the future would look something like this, "Sure you can get 500 channels on your cable television box... but after you've finished watching the Yale interview with author Kurt Vonnegut, can you get the 2004 rock climbing championship from Joshua Tree California?" TiVo... your tv. Who you want, What you want, When you want, How you want it (did we mention without the commercials?)... Why would you want anything else?

There will be a huge market in organizing, monitoring and broadcasting this new media. Tools will be needed to filter content and create a truly unique experience. Guides will need to be written and monitored along with these search tools.

This new content will become a stepping stone for the most creative to be picked up by the traditional mainstream content distribution channels -- to be discovered so to speak.

As the hand held video content becomes avaialable to every creative college kid, new shows like MTV's jackass will be developed without the constraint of media censorship. This new content will be promoted both by word of mouth but as well as by tracking services like today's Technorati ranks blogs and their popularity.

It is going to be a very exciting time for television over the next 10 years.

Although as fantastic as the TiVo service is, it's numbers are still tiny comparred to the potential. Two million subscribers is just tiny. Microsoft even smaller. But Bill Gates is putting $20 billion into this living room initiative and that may change some things.

The biggest barrier to adoption of a living room PC, either Microsoft's MCE or TiVo's Linux based system (really it's a computer and not a set top box), is the initial cost and that consumers NEED A REASON to upgrade and adopt the technology. The problem is the chicken vs. the egg and herein lies the rub. Those that truly understand how great TiVo is already have TiVo. You hear over and over again... "I wish I had just bought it earlier... it's so fantastic."

HDTV is one reason to buy it and upgrade, especially as the sale of HDTVs is exploding. Unfortunately Microsoft or TiVo still haven't gotten this one right yet. TiVo is ahead of Microsoft with a satellite HDTV unit but Microsoft's MCE 2005 and it's limited OTA capability is not enough to drive the consumer to buy the machine.

Offering viewers alternative television programming at the smallest level is a reason to upgrade. We all are fanatics at something, hobbyists, enthusiasts -- fractured in our pursuits, but even more enthusiastic about them than television.

Initially research should be done to find the most profitable niches below mainstream television for maximum penetration.

As crazy as it sounds, you may be able to TiVo your kids' little league game and watch it later as someone on the team picked up the responsibility of videotaping it... or perhaps the Little League organization itself subsidises these tapings to promote their organization and bills the teams through the standard fees and dues. It could happen a lot of different ways once the delivery mechanism is worked out by Microsoft or TiVo.

To tap this market will drive the sale of these units. Whether Microsoft or TiVo tap it first via broadband delivery remains to be seen.

This idea is not original. The movie Dodgeball did a wonderful job of prediciting it with Dodgeball championship coverage from Las Vegas via ESPN8... which I'm sure will be broadcast over broadband.

[David K. Dean @ Dec 19th 2005 12:05AM]

When is TiVo going to release a Series 3 box that has built-in 10/100 Base-T Ethernet (no more stupid USB to Ethernet converter)? I have broadband through out my whole house and I want to use it without have to hack anything or use some lame converter.

I also want support for HDTV and digital optical audio out! As soon as they implement these features I'll buy 2 TiVos!

I'd also like to see a "power user" model release with 2 or more tuners and hard drives in 1 box.

I wish consumer electronics companies would actually sell products with ALL the features consumers want and not want Hollywood wants us to have. The sooner they realize this the better we will all be.

Dave

[Johnny Miller @ Jan 5th 2006 4:05PM]

I had a Series 1 for years until I got an HDTV. I had to cancel the Tivo service and get the cable company's box in order to DVR HDTV. I have a pocket full of cash waiting for Tivo to release the HDTivo for cable. Hury up!!! Is it here yet? Is it here yet? Is it here yet?

[bmiller @ Jan 9th 2006 2:11PM]

Why is TIVO subscriber-based? Would I buy a vcr, then pay a monthly fee?... no. Looks like TIVO has fallen into the RCA Media market model, that consumers don't wish to buy outright, but keep paying i.e. Divix, etc.



We're paying enough for TV as it is.