TIVO - this is pretty reassuring, makes me want to buy it now while it's still cheap.
Personal TV recorders set to go mainstream into 2000
By Scott Hillis
December 17, 1999 18:54
LOS ANGELES, Dec 17 (Reuters) - Has DVD lost its thrill? Is home theatre ho-hum? For restless videophiles wondering what to put on their Christmas wish lists, personal video recorders may be just the thing, if not for this year then next.
The machines, called PVRs for short, record 10 to 20 hours of shows on vast hard drives. They can "pause" live television, recommend shows based on your tastes and record your favorite shows automatically.
But carrying price tags from $500 to $700, the VCR-like boxes have not attracted droves of buyers this year.
Many in the electronics and television industries, however, predict they will soon become standard in homes, giving TV viewers unprecedented control over what they watch and how they watch it.
The companies first out with products, TiVo Inc. and Replay Networks, are set to see sales skyrocket in 2000 after generating buzz this year.
"This year we prove the technology, we build the retail channel and start to educate consumers about it. The process has only just begun," Jim Barton, TiVo's chief technology officer, said in an interview this week at the Western Show, the cable industry's big annual convention in Los Angeles.
TiVo has striven to get the word out, getting its devices into nearly 3,000 retail outlets, taking its stock public and launching a colorful ad campaign featuring a cartoon "Tivo" television character with legs and a smile.
Company executives declined to give exact sales figures, but said they were comfortable with analyst estimates of 25,000 units this year.
Replay, by contrast, said sales number were in the "thousands."
"We're holding back right now because we're not in retail and it's kind of a waste of money (to advertise). Next Christmas is really the breakout Christmas," said Steve Shannon, Replay's vice president of marketing.
But the two start-ups are now threatened by none other than software behemoth Microsoft Corp. , which on Tuesday partnered with satellite TV provider EchoStar Communication Corp. to build video recording into its WebTV service.
Although Microsoft's service is limited to EchoStar customers, its deep pockets will make it a serious rival.
"We take Microsoft very seriously, even more seriously than TiVo," Replay's Shannon said.
But Microsoft's entry also confirms the potential of the marketplace, which is consulting firm Forrester Research forecasts will reach 14 million customers in 5 years and rival VCR penetration in 10 years.
"I don't believe this is a niche phenomenon," said Forrester analyst Josh Bernoff, who counts TiVo as a client.
"It will be as fundamental a part of the viewing experience as remote controls and VCRs. In 10 years, everyone will be watching TV differently."
PVRs have also been largely accepted by broadcasters, who were initially spooked that viewers could skip over commericals, robbing them of their main source of revenue.
"The knee-jerk reaction from network executives may be, 'Oh my gosh, my economic model is changing!' The next reaction is 'What's the opportunity?" said Stacy Jolna, vice president of programming and media partnerships for TiVo said.
Eventually, TiVo says it will get out of making hardware entirely -- it now pays subsidies to get its boxes made -- focusing instead on its personalization services.
"If they become synonymous with quality television recording, they may be able to charge a premium for their service," Bernoff said.
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