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When I attended Seven’s TiVo launch last week, I was struck by the narrow terms in which the consumer benefits were presented. Yes, TiVo will surely be the best PVR on the market, but its most important feature is its ability to capture video content from the Internet.

TiVo is just the latest of many household appliances that include Internet connectivity.

Within just two years millions of Australian homes will have entertainment devices with a network connector or WiFi antenna on the back. I liken this to an invasion of Trojan Horses into the living room because that little blue cable can deliver an army of new applications to your TV.

For more details, see this Industry Briefing Note I wrote for invetsment bank Lincoln Crowne Company.

Current technological and social trends are paving the way for the Internet to topple television as the dominant source of home entertainment. The line between television and the Internet is already rapidly blurring.

Over the past 20 years the Internet has changed the way we communicate, get information, and do business. Now it’s turning socialising and entertainment on its head. And that won’t take 20 years. Two years would be closer to the mark.

Time spent in front of the TV is falling and Internet usage is climbing. A recent Australian survey found that the average Australian spends as much time on the net as watching TV.    Â

Download the industry briefing paper I wrote for Lincoln Crowne & Company (an independent boutique investment bank) for a detailed analysis.

TiVo recently announced that they will be launching in Australia as a free service. This is a very smart move, and assuming there are no hidden catches (such as the free service being for a limited time only) will guarantee rapid takeup and will motivate consumers to go digital. That’s good news for the government who are planning to start shutting down the analogue TV service in less than 2 years time.

On the other hand, TiVo is still a proprietary system controlled by the TV industry, and in the light of with Nine’s recent success in the courts it looks like the market for PVRs in Australia will be artificially limited. Download the industry briefing paper I wrote for Lincoln Crowne & Company (an independent boutique investment bank) for a detailed analysis.