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Sunday, Nov 8, 2009
At the top of the heap of firms looking to rule the home media center is Microsoft, which released the first version of its Windows XP Media Center Edition operating system in the fall of 2002. At that time, the company was only selling the software through computer manufacturers as a pre-built media center system. The computers were relatively expensive (around $1,600), but they were sold as top-of-the-line machines, systems with enough power to manage all the media in your house.
Microsoft sent me a review unit of a Hewlett Packard-based media center computer back then, and I thought the system was quite good, though hardly perfect. You can connect it to your TV pretty easily, and the machine did the job of a TiVo well enough. However, I did notice there were certain advantages to running your media center on a PC over running one from TiVo: Microsoft's TV recordings can be more easily burned and recorded to DVDs, and the shows are available, via a home network, to any other PC in the house. With a media center PC, you can easily trade shows over the Internet, and the system will make it simpler to play content from the Web -- movies and music that media companies would classify as "stolen" -- through your TV. A PC is, by its nature, flexible; with a media center PC, this flexibility is sometimes a wonderful thing.
Microsoft has upgraded its media center since its first version, and it has also relaxed the way it distributes the system, now allowing all kinds of PC makers -- even small, mom-and-pop shops, or weekend hackers -- to put together a Perfect Machine of their own. This is fortunate because pre-built media center systems are still not cheap; it's hard to get a bare-bones one for less than $600, and a reasonably well-equipped system will cost $1,000 or more.
The worst part about running your media center on a PC is that the machine's ugly (though you can find stylish PC cases), it's loud, and it takes forever to start up. These may sound like small problems but they're not. We're used to dealing with delays on Web browsers but not on TV. When you press a button to select a show on TV, you want the show to start within one second, not 10. "There's a big difference between what you can live with in the office and what you can have in your living room," says Matt Haughey, who runs PVRblog, which covers media machines. "In a living room you can't have noise, you can't have heat, it has to work, it can't be clunky." Microsoft's system works most of the time, but because it runs on a full-fledged PC, sometimes it feels clunky. And in the living room, in your pursuit of indulgence, sometimes is just enough times to be annoying.
To many Mac fans, Apple's introduction of the Mac Mini earlier this year seemed to signal the company's desire to build a media center PC of its own, along the lines of Microsoft's effort. The Mac Mini -- which, like a TiVo box, is small, silent and pretty enough for the living room -- blurs the lines between PCs and a consumer electronic device. So it's not inconceivable, Bernoff says, that Apple already has a media center machine built and on the shelf, ready to be announced whenever Jobs gives the word.
But could Apple quickly create a much better media center than the one TiVo has already built? Bernoff doesn't think so. TiVo's been in the business for years and it knows the ins and outs of building its machines. It's got great engineers who've cooked up and patented many of the key systems involved in building a digital media center. "If you ask whether Apple could create a DVR within 12 months, I will tell you they absolutely could and there's probably one sitting in their laps right now," Bernoff says. But could they quickly create one "that is absolutely terrific"? Could they create the Perfect Machine? No. The best way to do that would be to acquire TiVo.
In Bernoff's imagination, the perfect Apple-TiVo alliance wouldn't attempt to convert Apple's computers into TiVo systems. "If you take a PC or Macintosh and cross it with a TiVo, you're going to end up with a camel," Bernoff says. It's a description that perfectly captures a system like Microsoft Media Center: It does the job, but not very elegantly. "The people at Apple will tell you that to have a really great device, you want to make it so it does one thing, and it needs to do that one thing very well." This is the mind-set that brought us the iPod, Bernoff notes, and that's the same idea behind the TiVo.
Yet while TiVo and Mac won't be the same machine, they'll be in a sense connected at the hip if Apple buys TiVo. "If you have an iPod, then you ought to be able to connect it to your TiVo," Bernoff says. "If you have a home network, it ought to recognize that instantly and let you play the sound from the TV and out of the Airport Express." Ideally, you should be able to use Apple's iTunes store through your TiVo, and even more ideally, you should be able to buy movies and TV shows, not just songs, from that store.
There's an element of whimsy, or at least wishful thinking, to Bernoff's suggestion. TiVo and Apple are everyone's favorite tech brands: Who doesn't think it would be great if they joined forces? But Bernoff insists that he doesn't care about "the sentimental factor"; purely as a business deal, he thinks an Apple-TiVo alliance would be grand for both companies.
Bernoff acknowledges that Apple, which has never purchased an established brand, is unlikely to take his advice. Other analysts, responding to a recent uptick in TiVo's stock price, prompted by rumors that Apple was interested in a purchase, have looked upon the idea even more dimly. Investment firm Smith Barney told Forbes that Apple executives "want to stay focused on selling select proven products (e.g., iPod) rather than gambling on unknown initiatives."
Still, it's not hard to see how both companies would benefit. What TiVo needs most, Bernoff says, is marketing muscle. Apple taught the world about music players through its iPod ads, and in the same way, it can teach the world about digital video recorders. Without a major acquisition and an infusion of cash, "I think they're going to have a rough time," Bernoff says of TiVo. "They say they're going to be profitable next year. But that's going to mean backtracking on some projects, and the things that make the company great will get swept away."
Apple would also benefit mightily from such a purchase, as Bernoff sees it. TiVo is in many ways already the Perfect Machine. All it needs is a little more engineering, a little more advertising, and TiVo fever could grip the nation, turning the device into the kind of blockbuster the iPod became. Bernoff's firm once surveyed about 600 owners of DVRs, most of them TiVos, about their attitudes toward their devices. In their responses, "19 percent used the word 'love,'" he says. "It's not often that people use that word to describe electronics. But these people are crazy about their TiVos. You meet these people at parties and they won't shut up. We found out, actually, that on average, each user tells seven other people to buy one."
The only other tech devices that inspire so much love among their users are Macs and iPods. Indeed, Bernoff puts Steve Jobs directly on the spot, saying that Apple is the only company that could make a success out of TiVo. The two companies' customer base, as well as employee culture, are very similar. If TiVo were purchased by any firm other than Apple, Bernoff believes the product would suffer. "I think it will mean that the extraordinary will become the ordinary."
Apple's genius is in making the extraordinary more extraordinary. "If I were sitting across the table from Steve Jobs right now," Bernoff says, "I'd ask, 'Do you want to keep making product for people who are only interested in digital music? Or do you want to get something that's much more popular?'"
What about it, Steve?
