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August 13, 2007


Davinder Jawanda

Regarding your statement, "If the cable companies really want to counter the threat of TiVo, they are going to have to come up with a service that is better than TiVo...Not one that is worse, but free", if a significant portion of TiVo's customers or prospective customers value $180 (a one year subscription for Tivo based on your numbers) more so than having to watch commercials, then this Time Warner service will help TV networks maintain advertising rates (by stemming any decline). In turn, TW will boost the value of their cable system to these television networks, and thus TW will be be in a better position to sustain or increase their own rates charged to the networks. Because TiVo's real threat to TW is declining revenues brought on by the fall of ad revenue at the TV network level, this move can help counter the threat of TiVo without having to displace TiVo entirely.

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