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The Time Is Right for PC DVRs

7/18/2004 8:00 PM Eastern

These digital video recorder devices are wonderful. Probably like a lot of you, I not only appreciate that DVR-enabled set-tops are flying out of cable warehouses (thanks TiVo!), I also enjoy using them myself. But I have devices in both my home and office that record shows, track my preferences, include more storage than I could ever watch … oh, and provide literally millions of on-demand programs I can’t get anywhere else and let me control them anytime, anywhere through any Web-connected device — like my cell phone or my Blackberry.

A hacked TiVo? Something left over from the interactive-TV trials of the mid-90s? A new consumer electronics gadget? No, no and no. I’m referring, of course, to my humble personal computer with a reliable broadband connection — and some simple wireless gear.

Wait a second: using a PC instead of a DVR? Those of us with a long history working with new cable technologies can be excused for smirking at this point. We’ve tried partnering with Silicon Valley types to deliver content, and it didn’t work. Surely a PC — even with a nice fat net connection — isn’t up to the job of streaming, downloading, securely distributing and, lest we forget, charging for high-quality video content as effectively as these two-way fiber-optic networks we’ve spent billions creating, is it?

Well, probably not yet. But that doesn’t mean this option shouldn’t be on cable’s radar. As reported in the last few weeks, at least one prominent DVR-maker has made “Internet-based TV services” their central technology strategy. The lightning-fast advances of several technologies — wireless, cellular, streaming video, home networking and yes, DVRs — are pushing entertainment and communication envelopes and have made TV-over-broadband at least possible today. And although big network names are rightfully cautious about broadcasting over the Internet, a few prominent content providers and advertisers are already testing these waters.

SO WHAT’S ON?

Starz Encore Group LLC, for example, recently launched a subscription video-on-demand service in conjunction with Real Networks Inc. Their reasoning, according to director of interactive television technology Rebecca Lim, was simple: Broadband numbers are now reaching critical mass. Still they’re keeping their ambitions modest.

“Right now we’re targeting business travelers and people with high-speed connections,” she said. Billing systems and security are challenging issues for wider acceptance.

The technical challenges notwithstanding, more programmers will almost surely attempt online distribution soon. But getting TV viewers to use PCs involves far more than posting cool content — as many “home media center” vendors can attest. While heavyweights like MSN, Yahoo! Inc., and America Online position themselves to be your online conduit to everything (including TV), the best software in the world probably won’t get the family to watch programs on a PC screen. To actually replace DVRs, PCs need to get programming to your TV.

A DVR ERECTOR SET

And setting up a PC as a DVR is not for lightweights. Even if the end result provides Internet-connected ultimate control over your TV watching, configuring today’s hardware and software to accomplish this task makes setting up a commercial DVR look like child’s play. To truly emulate the video control of a DVR, you’ll need a wireless “video sender” connected to your PC (typically via USB) and an accompanying “video receiver” connected to your TV. Once you’ve captured or begun streaming video, the available PC software to select programs — not to mention a TV-based accompaniment to watch them — hasn’t progressed beyond the “search results” phase.

While none of these steps is terribly difficult or costly (the sender/receiver hardware sells for well under $100 retail), the process clearly excludes your average coach potato. But then, so initially did DVRs — to a certain extent they still do. Unfortunately, PC usage actually has much larger issues to tackle than consumer acceptance.

A FEW BUGS IN THE SYSTEM

From technical and subscriber-usage perspectives, a few hardware setup glitches pale compared to larger issues that cable began tackling decades ago.

Security comes to mind immediately. Digital rights management and similar schemes have made substantial progress over the past few years but passing unprotected video around wireless or other IP-connected environments surely raises major concerns. Cable providers have spent decades hammering out conditional access — not to mention trapping and other safeguards — and should rightfully expect similar protections from a PC-based DVR. Even the strongest PC advocates admit comparable technology is in its infancy.

Piracy also comes to mind, of course, though PCs and current DVRs differ only marginally on this score. Viewers in either case have access to locally-stored digital video files and the ease with which a viewer can make copies might actually be easier with a stand-alone DVR: some models already include built-in DVD burners.

Acceptance by average subscribers is far from assured. Once they’ve endured the hardware setup pain, many viewers may still be utterly flummoxed by how to record and play back programs from their PC. Compared to the relatively simple interfaces supporting these features on DVR set-tops, current PCs offer Web interfaces that consciously avoid standardization and play to niche audiences.

Finally, network bandwidth limitations might be the ultimate pitfall. With high definition DVRs around the corner — and download and streaming speeds not (yet) able to keep up — will subscribers be satisfied with lower resolution video from their PC DVR?

'NEVER GOING TO HAPPEN’

Taking these daunting obstacles into account, the savvy cable executive might be tempted to dismiss the PC-based DVR as yet another Silicon Valley pipedream. Recent history, however, counsels us to not be too hasty.

Early DVR companies invited plenty of scorn for offering “redundant technology” (don’t people already have VCRs?). Similar belittlement greeted other ideas that proposed using the Internet to improve existing technologies — like voice-over-Internet Protocol (VoIP) and selling MP3 files.

No, the PC won’t replace the DVR set-top box tomorrow. But the technology is improving, content providers are experimenting, advertisers are fishing for DVR alternatives, and the core features — vast libraries of programming available and controllable on a personalized schedule — enhance what viewers already say they love about DVRs. Stephen Johnson is a broadband tech analyst with Coach Media.

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