Oct 27, 2003  •  Post A Comment

Rupert Murdoch to buy TiVo? HDTV sales to soar in 2004? Yes, “The Great Swanni” has taken out his crystal ball and is ready to make some predictions on the future of television. So let’s get it on:
HDTV Sales Will leap in 2004
Only 7 million homes now have high-definition TV sets due to high cost and a paucity of programming. However, sales have been rising in the past year, thanks to a sharp drop in prices. You can now buy a hi-def set for under $1,000.
Consequently, many industry analysts are predicting that HDTV will have a big holiday season, despite the fact that there are fewer than 10 hi-def networks on most cable and satellite TV systems. For instance, Yankee Group analyst Adi Kishore recently told the Seattle Post-Intelligencer that hi-def sets would appear on many holiday gift lists. “Absolutely. The content is only going to grow. It’s one of the biggest issues in the cable television industry right now,” Kishore said.
However, Kishore and others are putting the cart before the horse. Regardless of whether the new technology product is a video game console, a DVD player or an HDTV set, the consumer will not buy it unless the content is already in place. Despite the price breakthrough, I predict that most Americans will wait until next year before buying a hi-def set.
Several networks are expected to launch new hi-def channels in 2004-and cable and satellite TV operators will likely add them to their lineups. Only then will the average person see the benefit of buying and installing an HDTV.
Murdoch to Make Offer for TiVo
TiVo is in trouble. As I have noted in previous columns, the digital video recorder service has yet to turn buzz into buys, failing to reach the 1 million subscriber mark after nearly five years. And now TiVo faces stiff competition from cable TV operators who have launched unbranded DVR services.
Fortunately for TiVo, it has a licensing deal with DirecTV, the nation’s largest satellite TV service. Or does it? Rupert Murdoch’s News Corp., which will assume control of DirecTV following federal approval, owns a rival DVR technology service called NDS. Some Wall Street analysts are speculating that Murdoch will give TiVo the heave-ho after he takes over. After all, why pay TiVo a DVR licensing fee if you don’t have to?
TiVo, which now gets 50 percent of its new subscribers from the DirecTV audience, cannot afford to lose its biggest client. If Murdoch pulled the plug, the company’s stock would drop like a rock.
I predict that Murdoch will make an offer to buy TiVo as part of an agreement to keep the service on DirecTV. The media mogul has TiVo over a barrel; he can insist that TiVo sell the company at a reduced rate or hit the road.
Now, that doesn’t mean that TiVo will accept the deal. The company has vowed to remain independent. But you can bet that Murdoch won’t let this golden opportunity pass him by.
Phillip Swann is president and publisher of TVPredictions.com. He can be reached at Swann@TVPredictions.com.