As companies like Directv and others begin the process of working with DVRs of their own, TiVo is going to find itself without any subscription base if they do not act soon. One possible solution is to pursue their work with this project. If successful, this could be just what TiVo needs to keep their fat out of the fire.

Everyone knows it: TiVo is in trouble. DirecTV, TiVo’s largest partner representing some 60-70% of user base by some accounts, is abandoning TiVo probably later this year, when DirecTV delivers their own DVR. Existing TiVo users will still be supported, but DirecTV is expected to cease taking orders for new TiVo installations at that time, and slowly TiVo will start to see its monthly horde from DirecTV diminish. Meanwhile, most of the large cable TV companies are rolling their own DVR solutions as well. As of last summer, there was one glimmer of hope: TiVo was negotiating with Comcast to provide DVRs for the US’s largest cable company. Surprisingly, (now ex-) CEO Mike Ramsay walked on the deal because they would have made less per unit in monthly fees than with DirecTV. Many thought TiVo was foolish for not taking what they could get, especially with such a large partner. The end result is that TiVo’s fortunes are looking worse than ever.

Ramsay’s rejection of the Comcast deal may have been about more than monthly service fees. DirecTV TiVo owners know that DirecTV chooses not to support most of TiVo’s recent features, such as the Home Media Option, TiVoToGo, or web scheduling. This has hurt the attractiveness of TiVo for DirecTV users, and TiVo can see the writing on the wall. DirecTV is already championing their own upcoming DVR by proclaiming it will have revolutionary features that, ultimately, are mostly things that TiVo can already do, but DirecTV won’t support. The point of all of this is that Comcast may very well have wanted to do the same thing, and now that’s an even bigger problem for TiVo, because they have bigger plans.

There’s a glimmer of hope today as TiVo formally launches their Home Media Engine software development kit. For the first time ever, TiVo is allowing and encouraging third-party Java developers to tap into some of the features of TiVo to build new and hopefully useful add-ons.