Matt Haughey is getting beaten up in the comments of his post about ad banners coming to TiVo, but he's absolutely right to complain about TiVo's move. This is a big deal, yet another chapter (along with the recent TiVo-to-Go and Macrovision moves, and others in the past) in the "two masters" problem for TiVo.
TiVo's original pitch was that it transformed television viewing for the audience -- here are the set of features that you want to make it "TV your way." Most prominent among these features was ad-skipping -- certainly the reason I bought a TiVo. Ad banners during ad-skipping are, at the very least, an odd choice, and they dilute and poison the "TV your way" message. Matt's detractors have claimed that sophisticated TiVo users will be able to get around the new feature with the undocumented 30-second skip command, but they miss the point.
Jeff Bezos apparently likes to say that Amazon always tries to "delight the user" with the site's features; similarly, Steve Jobs talks about "lickable" user interfaces. Don Norman's recent book "Emotional Design" talks in depth about the emotional reactions great products give us. TiVo is still usable with banner ads, and it may still be possible for power users to avoid them altogether, but by any interpretation, a person who bought a TiVo to skip ads will not be delighted to see banner ads in their place. They will be annoyed.
Open source projects are often spurred by developers trying to "scratch an itch" they personally feel. TiVo has just spread Acme itching powder all over their product. With competition from above in the form of cable company DVRs, and from below in open source DVRs, is that really the right move? Do they expect the revenue from their banner ads to cover the potential lost revenue from users who come to distrust their motives?
TiVo is still thinking like a small company that has no option but bare survival. They should start thinking like a fighter. If they don't fight for their users, they will wind up fighting with their users, and that's a fight they'll lose.