I haven't looked at a Tivo financial statement in a while. A year ago, my read is that they'd be profitable this year. Instead, they cranked out these massive incentive programs. If you want to try a thought experiment, just look at their total number of subscribers and multiply by the service fees, and you'll get an impressive amount of inbound money.

In many ways, Tivo is trying to avoid being the next Apple. They're aggressively looking to license their software to the Japanese and Korean box builders -- a very sound strategy that could pay out in the years to come. Still, in the short term, Tivo is clearly being hammered by every announcement that satellite and cable vendors are giving DVRs away for close to free. Another long term gamble might be Tivo's patent portfolio. I believe they're suing Dish right now over patent infringement. These lawsuits take years to go anywhere, but the payout could be quite significant, particularly because, if they survive unscathed, they'd be able to twist everybody else's arms for royalties.