So how does TiVo respond' By increasing prices! Taking a page out of the cell phone business, TiVo announced last week that it was giving away boxes and selling subscriptions ranging from $17-$19 a month with multi-year commitments. The lifetime service agreement option of $299 has been eliminated.

Huh' It's the old "give away the razors, we'll make money on the blades" approach. The problem is, the DVR market is hardly the cell phone market, where vendors make money based on usage. The goal, like the cell phone market, is to increase subscription rates and market share. Unlike cell phones though, the television viewer already has many options vying for their dollars: cable, satellite, on-demand movies, NetFlix, etc. Does TiVo really think that new users are balking at signing up for TiVo because of the initial $199 price (and often cheaper with constant rebates from TiVo)' No, it's because they see similar DVR offerings from their cable companies for $5 (conveniently slipped into the regular cable bill) or because they are already getting nickeled and dimed to death by every other vendor.

While I'm being nickeled and dimed to death by TiVo, I'm afraid TiVo is slowly killing itself with desperate moves like this. The real answer is either charge us what the service is really worth upfront or get out of the hardware business altogether and provide a kick-ass service any DVR user could use. TiVo's real value isn't its hardware; it's their software and the services.

It's only a matter of time before some other vendor or open source player figures it out and TiVo is gone. In the meantime, I'll be saving up my nickels and dimes.

-- Mr. W

Mr. W is a Silicon Valley veteran, technology consultant and funkyfresh contributor.