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Technology Stocks : C-Cube -- Ignore unavailable to you. Want to Upgrade?

To: BillyG who wrote (43932)	8/17/1999 2:25:00 AM
From: DiViT	Read Replies (1) \| Respond to of 50808

TiVo and Replay face TV showdown --- (Thanks arusin) --- redherring.com TiVo and Replay face TV showdown By Tom Davey Redherring.com August 16, 1999 Fast-forward to 2005, when company names such as TiVo and Replay Networks are as dimly remembered as the Jack Parr Show. These two rivals have recently received a lot of ink as they've competed to capture consumer interest with their digital answers to the VCR. TiVo's recent filing for an $80 million public stock offering has spawned even more static. Now, these companies may face the wrath of broadcast giants CBS (NYSE: CBS), Walt Disney (NYSE: DIS), News Corporation (NYSE: NWS), Time Warner (NYSE: TWX), and Discovery Communications. The broadcasters, concerned about how easily consumers can delete or bypass advertising, are threatening to sue TiVo and Replay unless they obtain licenses to use their programming. Ironically, some of these broadcasters are current investors in TiVo and Replay. The potential loss of ad revenue is real, say analysts. But the broadcasters' ability to do anything about it is not. "The precedent for video recording has already been set with VCRs," says Joe Butt, director of consumer technology research at Forrester Research (Nasdaq: FORR). He notes that a quarrel over the same issues with the emergence of the VCR 20 years ago ended in defeat for the broadcasters. Despite the new machines' more sophisticated means of bypassing ads, Mr. Butt thinks TiVo and Replay will come out unscathed. FLOUNDER BOUND The real issue, he adds, is that the devices will flounder because of their high prices and narrow range of functions. Hardware costs of $500 to $700 plus a monthly service fee are unrealistic to expect from most consumers. Despite nifty features such as instant replay and slow-motion viewing of live broadcasts, the devices do not have removable storage, so they cannot replace a VCR; also, their recording time is limited to around ten hours. "These devices won't continue to exist in their current form," he says. "The technology will be bought and subsumed into something else." Consumer electronics giants such as Sony and Panasonic will combine the current functions with removable storage, gaming capabilities, and program guides into a single device. Motorola (NYSE: MOT) is already consolidating hard drives into set-top boxes. In the future, cable companies may give multifunction boxes away to consumers who subscribe to a large number of services.