TiVo's Future Gives Pause

"There are ways TiVo can tweak the model; a lower price for its HD DVR, getting rid of mail-in rebates, giving subs more pay options, and TiVo can continue to layer on new services like TiVoCast, and TiVo KidsZone, but frankly it appears the consumer is just not buying it," he added.

TiVo keeps experimenting with new tactics to lure in new subscribers, but the Street seems to be losing patience. Analysts are grumbling about how the changes mess up their ability to forecast earnings, which wouldn't happen if they weren't met with declining subscription figures.

"With their market opportunity slowly slipping away as mass adoption of 'generic' DVRs ... the company must aggressively pursue subscriber growth," wrote Alan Bezoza at Oppenheimer, which does no underwriting for TiVo. "With only 1.7 million TiVo-owned subscribers, we question their ability to stay relevant within the media and advertising industry."

The company's best hope lies with the same rivals that have been killing TiVo with low prices. After some delay, TiVo will start licensing its software this spring to Comcast and Cox Communications, a move that could make up for declining revenue from TiVo's partnership with DirecTV(DTV Quote - Cramer on DTV - Stock Picks) or that could help Comcast reverse-engineer TiVo's peerless software.

TiVo is crafty enough to find a way out of its current bind. But Wall Street is growing impatient, and the options are running out. It's starting to look like 2008 is a make-or-break year for keeping TiVo out of the historical dustbin.

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