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Number
24: October 15, 2003
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This week in Katydid:
Will TiVo Cross the Chasm?
I've seen a lot of armchair quarterbacking lately as marketers try to call new plays for TiVo. The consensus is that TiVo should have deeper market penetration. I'm sure they'd agree. According to Television Week, TiVo is in less than a million of the 100 million homes that have televisions. VCRs are in 90% of those homes. At the same time, TiVo has a rabid fan base with enthusiasm at the level of Apple, so many wonder why TiVo isn't more successful.
One reason TiVo's competitors have been able to gain some ground is that for too long TiVo focused on the benefits of the digital video recorder (DVR) rather than the benefits of the service. A DVR is a computing appliance that records television programs on a hard drive (or a DVD-R) instead of a tape. Because it buffers (stores) content in memory, a DVR gives you the ability to pause, slow, or rewind live television. During playback, you can easily skip commercials, or jump to a specific moment.
TiVo is a service that makes watching television more convenient. It combines a DVR with an automated tuner service. TiVo devices download the latest television schedules and use your programmed preferences automatically to record a customized line-up of content for you to watch at your convenience.
In "How to ignore your best customers, the TiVo Way", Jackie Huba of Creating Customer Evangelists, uses TiVo as an example of a company that isn't using their enthusiastic installed base to advantage. Also, Phillip Swann, in "TiVo's been Outflanked" and "DVR Industry: The 'D' Stands for 'Dense'" similarly takes the industry to task for not doing better.
Huba takes the 'new marketing' viewpoint that viral marketing – customer evangelism – should be the strategy. She contends that TiVo should devote most of their resources to help fanatical customers spread the good news. This is the tack taken by Krispy Kreme and Harley-Davidson.
Huba may be oversimplifying her own philosophy because in other material she stresses the value of leveraging many different hubs. In this article, Huba criticizes TiVo for focusing too much on celebrity endorsements even though she uses Oprah's book club as an example of an ideal network. Celebrities are powerful hubs for networks with national reach.
Swann contends that TiVo won't be able to penetrate some cable markets because of competitor deals already in place. Another of Swann's points is that the general market does not understand how a DVR works and so will not understand why TiVo is better.
Getting the Right Momentum
One of the greatest challenges facing TiVo is customer inertia. It's a misnomer that people watch television. Networks may still believe in appointment television, but it's rare to find anybody who uses the television that way. Television keeps us company. It sits with us while we do other things.
For an example, consider sports. Soccer and hockey broadcasts are not as popular as football or baseball because there is more action rather than less scoring. With football, you know you won't miss anything if you're reading your paper or cooking dinner. You know when something is going to happen by the sound of the crowd, or the tone of the announcers. With hockey, scoring takes you completely by surprise. To be caught up, you have to pay close attention to the game. Those willing to wait for the replay may as well catch the highlights on the evening news – when they know to pay attention.
The same model holds true for reality programming where you get many recaps as well as promos for upcoming events.
As proof, one needs look no further than the stacks of tapes that DVRs claim to replace. Tapes stack up because people don't watch them, not because they want to save them for later. Why don't they watch them? Because they were busy with something else. What did they do to keep themselves company while they were busy? They watched whatever was on.
TiVo, however, is for people who watch television, but don't like the inconvenience of the recaps, ramp-ups, and commercials. These customers watch TV for the content rather than the company.
TiVo customers love to talk about how TiVo changed the way they watch television. That may not be what most people really want. In fact, they may feel bad enough about the amount of television they watch now. For this group, becoming more efficient at watching TV is a good reason not to buy.
This is why marketers need to study behavior. They need to watch how people use a product because noone will admit in a poll that they use television in this way.
TiVo proves customer evangelism is a complex strategy. Most new businesses operate under the pretext of, "If you build it, they will come." The product is so good it sells itself. Viral marketers pick up on that fallacy and say, "They won't come unless someone they trust invites them." However, enthusiasm alone won't sell anything. Marketing can't be boiled down to one approach that works for everything. The art of the marketer is creating an integrated plan to move the business along in proper phases.
It looks like TiVo has done an excellent job of creating a product and developing an enthusiastic group of early adopters. The question remains, is this install base the right group to motivate a significant segment of television viewers.
Give Them a Good Story
TiVo will likely need multiple networks to motivate and penetrate such a vast market. They will need endorsements from celebrities and neighbors. They need customers to pressure their cable providers to use TiVo rather than create a competing technology. They need evangelists and momentum in every segment. Most importantly, each segment needs a good story to tell.
The current testimonials on the TiVo web site are moving in the right direction. They help by giving examples of how people will use the product. TiVo should develop deeper content on their testimonials section and they should begin to filter out content that focuses on the features of the DVR. Instead, they should emphasize the benefits of the service.
Seeding these stories properly is the key to motivating a network. It will be tough to get them going in the direction you want, once they've already gone down the other path. It's important to model language and stories for your customers and to elevate your favorite storytellers. Careful selection and emphasis of story for each sub-segment, rather than manipulation and saturation, is the winning strategy for getting TiVo to cross the chasm.
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