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Competition can come from anywhere. Let’s take the case for Tivo. I think the promise that Tivo made was (and is) compelling. You can watch your favorite shows when you want it (and without the advertisements)

In simple terms, this meant:
* flexibility - you can choose the time.
* save time - you don’t want to watch the advertisements

If you think about it, while this works great for viewers like you and me, it does not work well both for the producers of TV shows (they need advertisers for their shows) and advertisers (they need viewers to see the ads)

So, what was the solution that marketplace came up with?

The networks have started sharing the episodes over the web.
(Watch the home pages of CBS and ABC)

If the reason you wanted to buy Tivo was to catch your favorite shows, that reason may not be sufficient anymore.

The second thing that is making this complex for Tivo is that most TV serials are now available for purchase or rentals at stores like Blockbuster and Hollywood.

The point here is simple. Tivo innovated the TV industry a few years ago. The competition, however did not come from another set top box maker but from two different places - web and the DVDs.

I am sure Tivo is working on refining their own strategy in the wake of these developments and it would be interesting to see their response.

You got to innovate but you can’t rest after that.