DVR Pioneers Finding New Life—With or Without Cable


Sing to the tune of "Havah Nagilah," the bar mitzvah folk dance song:

TiVo & Replay

TiVo & Replay

TiVo & Replay

What do they portend?

TiVo & Replay

TiVo & Replay

TiVo & Replay

Is this broadcast's end?*

*[Additional lyrics, like everything in our world, available on demand.]

When I drafted those ersatz lyrics a few years ago, the two Silicon Valley upstarts and their widely recognized - but rarely purchased - digital video recorders were teetering toward oblivion. TiVo and ReplayTV's economic destinies were grim, despite the avid attention to DVRs' role in time-shifting, ad-skipping and video-on-demand services. DVR sales have floundered until very recently, well below the sanguine forecasts.

But, while cable companies have thoughtfully pondered and tested DVR concepts, TiVo and Replay are now showing new signs of independent life. When NBC veteran Martin Yudkovitz, who ran that network's interactive TV ventures, became TiVo President a couple months ago, the buzz focused on an olive branch from Silicon Valley to the networks and Madison Avenue.

The message actually may reach much further — and it may challenge cable's preoccupation with governing the rollout of DVRs and blending those devices into the bigger VOD.

Windy City display

Dozens of set-top DVR solutions will be on display at this week's cable convention in Chicago — just as they were at the SCTE Cable-Tec Expo in Philadelphia last month. While cable ponders what to do with these devices, TiVo and Replay and others are plunging ahead with sales. TiVo's recent quarterly financial report showed an 89% jump in new subscribers — putting its April 30 total at 703,000 subscribers, en route to more than 1 million by January. That would exceed TiVo's own previous forecasts, although still far below outsiders' rosy initial predictions.

More significantly, TiVo is aggressively adding ventures that bring it in congruence with its media doubters. For example, last week TiVo introduced audience measurement tools that will let broadcasters and advertisers analyze second-by-second specific viewing patterns within television programs. Simultaneously, the company unveiled research services that use this measurement capability to track viewing patterns within primetime programs.

These services won't ingratiate TiVo to civil libertarians (although privacy restraints will be present), but the tools will bring TiVo closer to media companies. And the boost in the subscriber base makes the package even more appealing.

Meanwhile, ReplayTV, almost given up for dead years ago when its initial public offering was pulled, then dismissed again early this year with few sales and $170 million in debt, is also stirring. The Japanese electronics giant that owns the Marantz and Denon consumer electronics brands is cooking up huge plans, operating as Digital Networks North America. ReplayTV and its sister company Rio Digital Audio (a pioneer in the MP3 music business) under the former SonicBlue company, have been rolled up into DNNA. Also bundled with them is Escient, which makes music-management products and software for searching, accessing and playing music. Escient is working on similar video search and preview software, which will be incorporated into ReplayTV VOD services.

Most tellingly, both TiVo and ReplayTV are selling stand-alone DVRs. Although integrated units — overwhelmingly devices built into DirecTV and EchoStar receivers — still represent more than half of the installed base, the DVR companies (these two plus independent technology providers) expect to move ahead while cable ponders its next moves. The new outreach among broadcast and consumer-electronics companies bolsters their position.

Obviously, cable is not slumbering. Just thinking about what to do.

And thinking. And testing, then thinking some more.

Comcast is running a trial of a single-TV DVR project in northern Virginia, charging $9.95 per month for the service, using a Scientific-Atlanta Explorer 8000 set-top box. This test is separate from Comcast's much-touted digital media-center trial using Ucentric technology, due to start "later this year," and serving multiple devices in the home. The Ucentric software will run through a Samsung set-top and is "very experimental," Comcast admits.

Mystro, please

And then there's Time Warner Cable's mysterious Mystro project, basically a network-centric DVR venture. Not to mention the Moxi mess, now absorbed into the Digeo debacle. Add countless other visions of what DVR service should look like, and cable is on a slow track.

Meanwhile, prospective customers can just wander into Circuit City or Best Buy and take the DVR issue into their own hands. I've already heard complaints that in limited test locations where cable is offering DVR, subscribers can only get the service if they sign up for the digital tier — another bit of sticker shock that consumers may reject.

Yup, it's cable's familiar song-and-dance that may encourage prospective customers to look elsewhere — and sooner — for their DVRs.