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Technology Stocks : Tivo (TIVO) Interactive TV -- Ignore unavailable to you. Want to Upgrade?

To: westpacific who wrote (156)	10/30/1999 2:46:00 PM
From: westpacific	Read Replies (2) \| Respond to of 2093

Potential lawsuits - big issue with the current television networks and ability to screen out commercials. But the path for TiVo and Replay isn't without potential pitfalls. The ability to easily record programs and zip through commercials has made broadcasters uneasy. Furthermore, a number of media firms formed a group that warned the companies about infringing on their copyrighted material. Both companies are also working to ensure that they haven't lost broadcasters because of the ad-skip capability. Currently, all the chips needed to run a DVR make them too pricey for the mass market. It's a complex setup. The boxes work by taking an analog broadcast signal and translating it into the ones and zeros that computers can understand. Then, they squeeze the data down with a set of chips called encoders and store it on a hard disk drive in a format called MPEG-2. When a user wants to watch a recorded program, the data goes through another specialized chip called that decompresses the data for display on a TV screen. "After the hard disk drive, the MPEG encoding chips are some of the most expensive components," said Michele Abraham, senior multimedia analyst at Cahners-InStat. Saving money on those chips is critical, because "manufacturers really need to get those boxes under $300 to make it a mass-market item," she said. Investors clearly think DVRs will be a big hit. TiVo, which just went public this year, is valued at $1.3 billion while posting revenues of only $33,000 for the most recently completed quarter.