If you were watching "Mad Money" last night (the wind-bag TV show, not the Katie Holmes movie), you got to see Windstream CEO Jeff Gardner shifting in his suit while talking to Jim Cramer about the universal service fund and intercarrier compensation. But the more interesting comments from Windstream executive ranks this week came from CFO Brent Whittington, who said at a UBS Global media and Communications Conference in New York that the telco was having trouble re-selling DVR service from partner TiVo.
"The upfront price requirements and the ongoing monthly obligation have been an impediment to that product really being successful for us," Telephony quotes Whittington as saying. "People are very price-sensitive. You're looking to potentially get a customer to buy broadband and pay the monthly recurring fee on that on top of TiVo's monthly recurring fee, plus the equipment, generally with the modem."
The Windstream-TiVo partnership was closely scrutinized when it was announced earlier this year. The DVR market has become increasingly varied since TiVo pioneered the territory, and while TiVo has collected other service provider partners, like Comcast and Cox Communications, services like AT&T's Total Home DVR, network-stored DVR capabilities and new set-top devices have begun to change the game. Traditional set-top boxes may be on their way out, which could be a boon to TiVo, but the DVR also may have to compete with residential gateways and new TVs richly embedded with features as the market continues to shift.
Aside from all this, Windstream's difficulty selling TiVo could raise questions about a traditional telco sales team's ability to market new kinds of offerings. It sounds like price was really the hurdle for Windstream customers, and we are not out to criticize Windstream's sales tactics. But, you have to wonder if other potential partners from the content, entertainment and consumer electronics worlds might also see things differently-specifically, if they might see this kind of situation as reason to believe that telcos aren't the best possible partners for them.
Hopefully, that won't be the case. Carriers who have chosen not to pursue IPTV builds increasingly have started to forge more partnerships with companies such as TiVo, Vudu, Roku and others that want to leverage their existing broadband connections. Those partnerships seem to provide the best path in the next-generation services world for many carriers, but how long can they wait for customers to buy in?
- Telephony reports on Whittington's comments
Windstream partnered with TV in November 2007
Remote storage DVR capabilities are on the way