TiVo has passed the three million subscriber mark, but the company that once led the digital video recorder market and became synonymous with the category faces a difficult future.

“We accomplished our goal of doubling our sub base to over 3 million subscriptions,” said TiVo chairman Mike Ramsay.

In the last quarter, TiVo added nearly 700,000 subscribers, including over 250,000 standalone users paying a subscription for the service directly to TiVo.

However, nearly two thirds of new subscribers came through DIRECTV, which is poised to launch its own digital video recorder based on NDS technology, similar to that used by Sky+ in the UK. TiVo is still talking to cable and telecoms companies to try and secure other distribution channels but has so far failed to seal a major deal and there has been speculation that TiVo may become an acquisition target.

Despite the intense loyalty of many of its existing subscribers, TiVo faces increasing competition from both the bundled offerings of cable and satellite television provides and rival multinational consumer electronics companies with their own standalone products.

The real threat to TiVo’s relationship with DIRECTV is that NDS can provide a competitive product that can be integrated with interactive services and conditional access systems as part of the platform.

As Sky+ has demonstrated in the UK, seamless integration with the onscreen electronic programme guide offers the ultimate in convenience and reliability. It may not provide the nicest user interface, or attempt to predict what you might want to watch, but for over 640,000 subscribers it has become an essential element of their relationship with Sky and transformed the way they view television.

Consumer electronics companies are also offering increasingly sophisticated standalone products combining hard disc storage with DVD recorders. Some of these license TiVo technology, but many do not. It is likely that these and other products will become more prevalent, particularly for free to air services.

The key to unlocking the functionality of digital video recorders in the future will be access to programme schedule information. The TV-Anytime standard remains the proposed mechanism to enable this, but whether broadcasters will adopt it in significant numbers anytime soon remains to be seen. In the meantime, perfectly functional products can be driven from freely available schedule data.

In this environment it is questionable whether there is a market for a separate subscription service such as TiVo.