Tivo Needs a Web Browser

I love my Tivo. I love the functionality. I love the design. The fast-forward speed is just right to still see the action on the ball games I missed. The Season Pass feature works flawlessly. The search function is great. I love being able to purchase TV shows from Amazon and have them downloaded directly to my Tivo. My Tivo is hands down better than the cable company DVR offering.

My problem with Tivo is the company is missing a no-brainer innovation: a web browser.

A web browser for Tivo would be awesome. I could surf the web on my large flat screen. It would be much easier to watch web videos, such as TV shows on Hulu, on my TV. I wouldn’t have to bring a laptop into the family room when I’m relaxing after putting the kids to bed.

I know, I know…Tivo doesn’t have a keyboard and the menu for typing letters in Tivo is clunky. A solution would be to add a software patch, so users could use their own wireless keyboard with their Tivo. The more recent versions of Tivo have a couple of USB ports in the back, so one could be used for the wireless network adapter and the other could be used by a wireless keyboard.

Are there any outside forces preventing Tivo from including a web browser in their software? One possible answer may be the Tivo’s corporate strategy of trying to get the cable companies to license the Tivo software for their DVR offerings. The cable companies may not like a web browser embedded in the Tivo software if it would hasten consumer adoption of direct web video watching. By waiting to unveil a web browser, Tivo may be trying to make negotiations with the cable companies easier. Maybe the big cable companies, like Comcast or Time Warner think a Tivo box with a web browser might encourage their customers to give up through cable subscriptions.

Although a the web browser within Tivo would improve my Tivo experience and would drive me to get a second Tivo box, Tivo’s management may not think it would be enough of a game changer to improve their Tivo-owned subscribers. Tivo’s original business model of marketing to consumers directly and through retial distribution enabled them to acquire customers who were deemed “Tivo-owned.” They also acquired a ton of customer through a relationship with DirecTV. Tivo earns a higher monthly revenue for the Tivo-owned subs, but the cost of acquiring these subs is very high. Tivo seems to be focused on growing its subscribers through MSO/Broadcasters because the acquisition cost of these subscribers is so much cheaper and more scalable. I think consumers are looking for devices to help surf the web through their TV. If Tivo had a web browser integrated into its software, it would make a Tivo purchase more compelling.

Another reason for not introducing a web browser is to wait until the court case with the Dish Network is resolved. Some market commentators think DISH will have to buy Tivo to rid itself of its legal liability. If this is the case, it makes sense for Tivo to keep costs down until there is more legal clarity.

I am simply guessing at reasons why Tivo hasn’t rolled out a web browser is because they don’t want to anger the cable companies. If I am wrong, Tivo is missing out on a large opportunity to extend their lead in best customer experience among set-top boxes by not incorporating a web browser.

Disclosure: I own shares of Tivo for client accounts.

Companies mentioned: TIVO, DISH, DTV, CMCSK, TWC, CVC, VZ and T.