Shift, Store and See - Shake Up the Old TV
Are personal video recorders (PVRs) over-hyped or do they really represent a revolution in the video distribution model? Digital Broadcasting.com columnist Gary Arlen examines the current state of the technology and lets you decide…
TiVOReplay.
Digital video aficionados talk about the two PVR pioneers as if they were umbilical twins – all one word – even as TiVO and ReplayTV vigorously compete for an unknown market.
They'll soon be joined by an array of other purveyors, even though the rosiest predictions foresee fewer than 300,000 U.S. homes with these set-top devices by year end. Yet PVRs (or DVRs, Digital Video Recorders, as Replay TV prefers to call them) are ready to blast off.
Those same forecasters envision 20 million units deployed within the next five years – partly as replacements for videocassette recorders, but also as video appliances that will overhaul the way TV works. Buoyed by a New York Times Sunday magazine cover story last month that declared that PVRs will change TV forever, the existing and would-be combatants are lining up allies and deals.
The players
Microsoft has been in the game for over a year, via the EchoStar Dishplayer 500, an integrated satellite receiver with a WebTV access device that includes a 15 hour-capacity hard drive. Future generations of this combination are part of the growing Microsoft TV platform family – including the "UltimateTV" service, recently unveiled. In late summer, Sony introduced the SAT-W60 DirecTV system with UltimateTV, a set-top box that includes a combination satellite receiver and PVR.
NDS, a satellite technology company, has been showing its Xtended TV (XTV) format for more than a year, and at last week's IBC event in Amsterdam confirmed a deal to deploy it as "personal television recorders" through British Sky Broadcasting. The integrated SKY package also provides hints about how PVRs could be used to give digital television broadcasters a new mega-channel opportunity – an idea that is not lost on NDS's parent company, News Corp. (which happens to own Fox TV).
Metabyte Networks, a start-up personal TV technology and service company, this week (September 12), has allied with the Starz Encore Group to create personalized interactive broadband services, built around Metabyte's MbTV technology. The companies foresee applications, such as subscription video-on-demand (S-VOD) services in both one-way and two-way digital broadband markets. They're looking at set-ups using PVRs and future t-commerce applications for movie-related programming.
Like many of the other "smart" systems, the MbTV client software tracks viewer's habits and enables time-shifted viewing as well as other interactive television offerings.
TiVo and Replay battle it out
Meanwhile, TiVO and ReplayTV continue to escalate their skirmishes on several fronts. In moves reminiscent of the early Betamax vs. VHS battles of two decades ago, the companies are in a time-capacity battle. ReplayTV upped the stakes this month by introducing a single-drive machine able to store up to 60 hours of video (about 60 Gigabytes) – more than double the current maximum capacity on recorders that require two hard drives (and thus a higher price). Of course, more than three years ago, the Microsoft battle-plan envisioned affordable PVRs with a Terabyte of storage by the middle of this decade.
Significantly, the new ReplayTV receiver uses a hard drive built by Maxtor, the first time that manufacturer has plunged into this market. Quantum and Seagate have worked with the first movers. But now Maxtor – like other computer component suppliers hungry for new markets – is looking toward this set-top device as its salvation.
On other fronts, TiVO, Replay, Microsoft and others are staking significant early claims. Time Warner Cable has allied with TiVO for pilot project that will put the devices into cable homes to explore the opportunities for downloading content and advertising to the set-top. How handy, that America Online (hoping to become Time Warner's parent) is also an investor in TiVO.
Meanwhile, ReplayTV recently unveiled a similar alliance with Comcast, the nation's third largest cable operator.
Of course, these set-top boxes need a brand name – and again the alliances are building.
By year-end, all the major consumer electronics manufacturers will have picked a side - although, as in the Beta/VHS epoch, don't expect those deals to be long-lasting or exclusive. So far, TiVO has attracted Philips, Sony and Thomson (RCA), while Replay has Panasonic and Sharp on its side.
Better living through bits
The more intriguing issues, though, involve the next wave of services to be offered through PVRs. Grabbing and storing video programming – thus creating a vault of on-demand programs available whenever a viewer wants to see them – is just the beginning. What about the Internet? Since all the devices have a phone (or cable) connection, there are inevitable opportunities to blend Web content with TV shows. That was the original concept behind Web TV.
So far it has been implemented merely as overlays – e.g. watching a sports event and displaying enhancing content from an appropriate Web site around the edge of the page. The next wave, however, will offer "contextual" connections. For example, as a viewer builds a pattern of watching a certain kind of show, the recommending feature in the device can offer to fetch relevant Web sites.
ReplayTV describes the example of a fan of "This Old House" being steered to various home improvement or repair sites. The business model envisions that the Web sites, or their advertisers, would pay for such involvement – important to ReplayTV, which does not assess a monthly fee upon its customers.
TiVO and others are trickling down Internet content in various ways, also with the goal of having customized video content on the hard drive, ready to display at the right opportunity. The companies are treading cautiously about alternative commercial insertions – but some of their network and advertising partners are exploring how to use this capability for targeting specific messages to individual viewers.
Indeed, that's one of the ways in which digital TV networks, as well as satellite carriers, can exploit the personalization factor of these boxes. For example, Fox – with its cable stable of Fox Family, Fox Sports, Fox News, fX, Sports and other channels – could blast a tailored mix of material through its over-the-air DTV channels in Standard Definition TV format.
The programs could be stored on the set-top box, hawked through the on-screen Electronic Program Guide – and seen on-demand with personalized commercials. CBS (with its Viacom cousin networks), ABC-Disney and NBC could package similar program bundles.
First, however, these PVR units must be deployed. Beyond the EchoStar, DirecTV, Sky and other satellite deals, there's the great challenge of integrating PVRs into digital cable set-top boxes. Pace has already introduced such a device, Sony is flirting with the plan while Motorola (formerly General Instrument) and Scientific-Atlanta have shown prototype devices.
That leads to the bigger question: "Who needs TiVOandReplay?" The recording, storage and EPG technology could be licensed by any manufacturer and sold as standalone boxes. That's what the escalating battle is really all about. During this positioning and posturing stage, the growing number of providers are lining up the deals to make them indispensable as the PVR assault moves through the digital arena.
Gary Arlen is president of Arlen Communications Inc., a Bethesda, Maryland, research firm that specializes in interactive media services. He can be reached at GaryArlen@aol.com. (Back to top)