There’s some good news and there’s some bad news. I’ll give you the good news first. Digeo, the shepherds of the Moxi DVR experience, has escaped bankruptcy and liquidation. With what I assume have been slowing cableco sales and poor retail sales, Arris (ARRS) has stepped in and essentially bailed them out for a mere $20 million. There’s also some good news for the non-executive and non-HR Digeo staff… who will be retained. For now.
The bad news is well known by the investors and owners who’ve taken a bath on such a promising property (Moxi) that never really gained the traction and following it probably deserved. There’s been all sorts of chatter regarding the $110 million investment Digeo, a Paul Allen Vulcan property, made in Moxi back in 2002. But that’s just a portion of the total amount that’s been keeping these guys afloat. Several hundred on the payroll is not a trivial expense, never mind development costs and infrastructure expenses. Which is probably why they’ve trimmed down to a lean 75 employees, the most recent and notable reduction coming as a massive re-org and re-focus in January, 2008.
Arris, who seems to primarily serve the cable industry with IP communications, intends to round out their portfolio with a multimedia end-user offering in acquiring Digeo. They see value in the Moxi experience, but perhaps equally important, they see value in Digeo’s intellectual property portfolio. Arris says Moxi customers, cable or retail, should not expect any interruption in service and that updates will continue to flow. But anyone who objectively analyzes the current US landscape will see little opportunity for a retail DVR to find wide success.
Which is why I expect the Moxi HD DVR to take a backseat to a renewed focus on serving cable providers. Although, as DirecTV continues to serve ReplayTV owners, the few Moxi HD DVR customers should continue receiving guide data for some time – even with a de-emphasis on retail. Additionally, I expect hardware prices will probably be slashed in the near future to unload inventory that they can’t move at $800/pop.