Picture imperfect for Netflix, TiVo

Sadly, my earlier enthusiastic endorsement of a Netflix/Tivo deal appears to have been premature. The CNET article, Picture Imperfect for Netflix, TiVo, makes a convincing case that such a deal is not immenient. But at the same time the article makes it clear that it is neither the technology nor the buisness plan suggested that is the problem. Instead the issue appears to be problems with exclusive contracts for prime release dates and that the content providers are still nervous about TiVo’s Digital Rights Managment software—software recently approved by the FCC over the major studios’ objections.

It’s still coming. Just not in 6 months.

Recall that the record companies didn’t care for Apple’s DRM either. iTunes was just a little test on a minor platform. But nobody dropped out over Digital Rights when iTunes made it clear that it had found the sweet spot at the intersection of price and user rights that could rein in runaway piracy. The same dynamics are set to play out for video—the difference is that audio can be easily downloaded over current bandwidth. Movies need real bandwidth (read fiber). When movie piracy becomes as scarey to the studios as the music piracy was to the majors TiVo will seem like a savior.

But not just yet…

And a TiVo settop box for LUS is still a good idea….