11/16/2008

TIVO ADDS DOMINO’S PIZZA TO ITS MENU

Domino’s is Pioneering a Whole New Way of Ordering…Via TV

ALVISO, CA & ANN ARBOR, MI — November 17, 2008 — TV has never tasted this good. That’s because TiVo Inc. (NASDAQ: TIVO), the creator of and a leader in television services for digital video recorders (DVRs), and Domino's Pizza, Inc. (NYSE: DPZ), the recognized world leader in pizza delivery, have teamed up to give broadband connected TiVo subscribers the ability to order pizza for delivery or pick-up, and track delivery timing, right from their TV sets using the TiVo® service. It’s a service that cooks up the perfect pizza purchasing recipe.

“Our commitment to customer satisfaction is what has helped us become the leader in the global pizza delivery market,” said Rob Weisberg, vice president of precision and print marketing at Domino’s Pizza, Inc. “We are confident that teaming with TiVo on this novel, easy, and convenient way to order pizza right from the TV will be very well received by our customers. This is the first step in the future of customer interactions with the brands they seek to engage with and buy from. This is the first time in history that the ‘on-demand’ generation will be able to fully experience couch commerce by ordering pizza directly through their television set. You’ll see a television ad for Domino’s and you’ll click ‘I want it’ through your remote. In about 30 minutes, your pizza will show up at your door.”

Karen Bressner, Senior Vice President of Advertising Sales, TiVo Inc said, “Joining forces with Domino’s Pizza creates an effective marketing and commerce tool for Domino’s while enhancing and further distinguishing TiVo as the ultimate way to watch TV with a closed-loop advertising experience. This exciting new partnership offers yet another advertising solution as commercial avoidance continues to increase. With just a few clicks of the remote, TiVo users can pause their program, order a pizza, and then sit back, relax, and return to their favorite show without missing a single second. Now, TiVo delivers the absolute best television viewing experience…and a pizza.”

TiVo subscribers can seamlessly access their Domino's Pizza order from various advertising entry points on the TiVo user interface including Gold Star Sponsorship, Program Placement, Interactive Tags in live TV spots, and through Music, Photos, Products, & More by clicking on “Order Your Dominos Pizza Now.” TiVo is serving up a piping hot new service that’s truly made to order and gives a whole new meaning to the term “TV dinner.”

TiVo subscribers can set-up a user name and password on Dominos.com so that each time they use their TiVo remote to place an order, they can log-in with a simple account number. Alternatively, TiVo subscribers can enter their delivery address, build their pizza order right from the television set by selecting type of crust, toppings, and sauces, and get the pizza delivered by their local Domino’s Pizza.

Bressner added: “Our commitment to revolutionizing interactive advertising and commerce on the television is a direct result of the innovative solutions and features we provide. TiVo’s growing list of interactive features also includes the ability to find and purchase products on Amazon.com related to a customer’s favorite TV show or the convenience of being able to search for a movie that’s playing nearby and purchase tickets through Fandango – all by using the TiVo remote.”

Starting today, this new service is free of charge to all broadband connected TiVo subscribers and supports both delivery and pick-up orders. Viewers pay in cash when the pizza is delivered.

The decision won't get TiVo into EchoStar's machines. Consider that bridge burnt. But investors likely believe the ruling will strengthen TiVo's hands in negotiations with other pay-TV providers, who may fear a patent suit if they don't get in bed with TiVo. Already, TiVo provides software for Comcast DVRs.

Here we know better. Software is the ingredient that turns content into quicksilver, shifting in time and place to the device we desire, at the moment we choose. Apple has mastered this alchemy, and others like Microsoft and Amazon.com are studying the fast; but to Sony it remains a dark art.

Online video remains immensely fragmented. Should you download a video on Xbox Live? Buy it on Amazon.com's Unbox via your TiVo set-top? Rent it on iTunes, and broadcast it to your flat-screen display with an Apple TV? The choices seem endless, and endlessly confusing. But none of them, I'd note, market themselves based on a format. The format, if any, is broadband, and a set of standardized audio/video connectors. The rest is fungible.

There will no doubt be a shakeout among online-video stores. If nothing else kills off the weaker players, consumers will rapidly tire of purchasing the same movies again and again. A rack of DVDs on the shelf provides a reassuring sense of permanence. Perhaps physical media will make a comeback. Warren Lieberfarb, who helped invent the DVD at Warner Bros. and now consults for Toshiba on HD-DVD, predicts that flash-memory devices might be sold in stores preloaded with video.

Sony actually had that idea, I believe, with its MagicGate memory sticks. Another nonstandard format, tied to hardware, with buggy software. The same complaints are being made about Blu-ray, with its ever-shifting specification requiring firmware updates. Sony, drenched in blood, stands victorious in the optical-disc format battle. Too bad the war is now being waged in another theater.

TiVo has been pinning its hopes on a new contract with Comcast and a new emphasis on selling ads. But hopes had run high that TiVo would make up with DirecTV. The two companies were strong partners early in TiVo's life, but their relationship has been on the rocks since 2004. Why would DirecTV want to put TiVo in its boxes now, when it can use ReplayTV software for free?

The TiVo service on Comcast is expected to launch shortly in its initial market, Comcast's New England Division, which includes metro Boston, Southeast Massachusetts, and New Hampshire, with the rollout process expected to continue throughout the fall. Activities, including trials, related to the TiVo service on Cox are expected to commence during our fiscal year ending January 31, 2008. We anticipate receiving cash payments for providing the TiVo service as a result of these deployments and expected subscription adoptions but do not expect to recognize a significant portion of these cash payments as service revenues during this fiscal year. Under the accounting guidance for multiple element arrangements, since the contracts contain undelivered elements such as future software development for which we do not have fair value, significant portions of these cash payments must be deferred and recognized ratably over the term of the agreement.

The entire mismanaged process can be viewed in Pay Per Post's discussion boards. Pay Per Post failed to include the bumper in the original call for posts. When the company realized its error, Pay Per Post continued to allow posts to be created without it, hoping to email the bumper after the fact.

At TiVo's request, Pay Per Post's "Director of Customer Love" Karen Allen sent emails asking posters to remove all videos, but the email didn't explain why, how , or when. Despite the takedown requests, Pay Per Post continued to list the "opportunity" in its directory of advertisements. Said one user:

Why is that post STILL available then? It's looking at me and WINKING! Saying ... take me! Feign ignorance! Get the money!

There was another opp that was supposed to be removed and I had taken it, but didn't realize that until I got the payout with an apology weeks later. Weird.

But really, the mismanagement of the TiVo campaign is beside the point. Certainly, Pay Per Post's antics didn't help matters. But more to the point, why would TiVo even have to pay bloggers to express faux affection for its video-recording devices? While TiVo's gadgets remain superior in their user interface, cable and satellite-TV providers are renting similar devices for much less. Having gone from life-changing to run-of-the-mill, TiVo no longer evokes genuine passion. The fact that it's now paying for fake testimonials from bloggers merely reinforces that it's getting no real love.

TiVo, you see, has tapped Pay Per Post, the controversial startup that pays bloggers to shill for advertisers' products, to help boost a YouTube contest accompanying the campaign, The contest purportedly called on TiVo users to post video testimonials to TiVo. The problem is that their testimonials are fake, generated by TiVo's cash, not customers' passion. The move was revealed when Sarah Hendrix opted to disclose she was being paid through Pay Per Post for her video. TiVo, we thought, already had a substantial community of fanatically loyal users. One would think the contest's prize, a free TiVo HD and lifetime subscription, would be motivation enough. No matter what you think of Pay Per Post as an advertising platform, the fact that TiVo is employing them to gin up fake interest speaks loudly to the fall of the TiVo brand.

1. No one's ever worn a digital watch.
2. "I'm Rick James, bitch" is just something old people say.
3. To relax, they've always turned on the nightly news. The news has always been delivered by comedians.
4. They don't know what a LOLCat is or why it talks that way.
5. They've always been able to use a cell phone on a plane.
6. Tattoos have always been normal.
7. Mr. Rogers has never taken them to the Land of Make-Believe.
8. Good sitcoms have never had laugh tracks.
9. Apple has always been a big deal, as have Google and Facebook.
10. They've never paid for a classified ad.
11. They've never danced to "Numa Numa."
12. Who's Mario?
13. Katie Couric has still never been a respected news anchor.
14. Kids have always had their own phones.
15. They've never "missed" a TV show that they couldn't watch an hour later.
16. Movies have always come in the mail.
17. They've never licked a stamp.
18. Americans have always worried about Muslims.
19. They don't care if Tony Soprano died, if Ross and Rachel ever got together, who got to be a millionaire, or who was a Cylon.
20. Lindsay Lohan was never innocent.
21. They've never read "People" Magazine.
22. They don't remember Castro or why he was ever a big deal.
23. What's a mousepad?
24. "Lord of the Rings" looks fake and the effects are laughable.
25. Andy Samberg has always been a movie star.
26. The Olsen Twins have always been legal, but it's still creepy to want Mary-Kate.
27. There's never been smoking in restaurants.
28. Saturday Night Live's good stuff has always been made for the Internet.
29. Pop stars have always worked with rappers.
30. Perez Hilton has always been on TV.
31. Computers have never been beige.
32. Role-playing games have always been played on the Internet. What's a 20-sided die?
33. All TVs are "high definition."
34. They've never had to pull over for directions.
35. Cafes have always been a place to work on a laptop.
36. The "dot-com bust" means as much to them as the Great Depression.
37. Ipods have always come with a phone.
38. Global warming has always been a major voter issue, and Republicans have always acknowledged it.
39. Vice presidents have never been useless.
40. Quarters have never all looked the same.
41. Abe Vigoda is still alive.

Services like iTunes, working with the Apple TV set-top box, and Xbox 360's Marketplace, offer a limited but growing library of TV shows and movies. Netflix, the DVD rent-by-mail service, is hiring hardware engineers. Amazon, currently a TiVo partner, is rumored to be working on a media-playing device of its own. And more networks are beefing up Web-enabled viewing like ABC's HD-like experience and ESPN 360. To top it off, there's the enigma that is Vudu, a set-top box that's built to replicate Netflix's level of service by offering a host of first-run, DVD-quality movies.

What TiVo has going for it is its ability to record live broadcasts, much of which never turns up on DVD or online video libraries. It also has mainstream appeal compared to Web-video downloads or multitasking game consoles and personal computers. But increasingly, it's going to be hard to convince consumers to buy a separate gadget and make room for it in their living room, when the devices they already have — PCs, game consoles, and even portable media players — can provide the same basic service of delivering video.

Microsoft, in particular, is trying to market the Xbox as a set-top box replacement, especially for phone companies trying to deliver video over Internet connections, a technology known as IPTV. That, more than anything, is what's likely spurring Sony's DVR move — and with Sony, Apple, and Microsoft sparring over the living room, there's going to be little room left for TiVo.

Karen Kramer from TiVo tried to Cease & Desist one of our customers today. We have a feature called PhotoRank that lets anyone (SmugMug customer or not) rank a photo by clicking thumbs up & thumbs down icons.

Apparently, TiVo thinks they own all use of the concept of a thumbs up being positive and a thumbs down being negative. Shaking in my boots (ha!), I went to the USPTO and discovered that they do, indeed, have trademarks on 'Thumbs Up' and 'Thumbs Down'.

But they're very narrow trademarks, specifically for interactive television and remote controls:

http://tess2.uspto.gov/bin/showfield?f=doc&state=qo3bti.2.39
http://tess2.uspto.gov/bin/showfield?f=doc&state=qo3bti.2.40

How exactly does SmugMug have anything to do with interactive television or remote controls? I wonder if Digg or any of the other bajillion sites using thumbs up / down are getting C&D'd too?

Valleywag will ask the founders of Digg and Consumating tonight, if Valleywag is still sober enough to talk.