Registered: Mar 2003
Tivo article in local paper today
Gearing up for a fight
By Ethan Forman
At the Andover home of Debbie Kravetz, digital video recording has arrived.
When she has to walk her two golden retrievers, she simply pauses the show with her TiVo, a service that works with a digital recorder, to save the rest of it so she can watch it when she gets back.
"Love it," says Kravetz of her TiVo.
She is on the cutting edge of technology that soon may become as ubiquitous as those rapidly aging VCRs. The days of scheduling around a favorite show are drawing to a close.
However, the amount of advanced technology being thrown at consumers over the next year, and the varying pluses and minuses that go with them, are enough to make even the most savvy television consumer's head spin. And going in one direction may leave viewers a year from now regretting the choice.
Consider the options.
There are digital video recorders (DVRs), and the optional TiVo service that enhances and simplifies the use. TiVo is cheapest when purchased with DirecTV satellite hardware and service, but it works with cable, too. Digital cable offers on-demand service, which allows cable users to watch a range of shows and movies when they want, with fast forward, rewind and pause functions. Then you have your modern DVD players that require no subscription, some of which can now record.
As for that VCR, with that blinking '12:00'? It may be time to put it in the closet.
Further confusing matters for consumers is the marketing war taking place among the companies vying for your entertainment dollars.
As Comcast, the dominant cable provider in the region, ramps up and expands its on-demand service for its digital cable and offers discounted bundled packages with Internet and phone service, satellite provider DirecTV is fighting back, beating cable to the punch in the digital recording market by partnering with TiVo, making the package less expensive.
But analysts are skeptical of TiVo's staying power as comparable technology shows up elsewhere, like cable.
With its sheer number of subscribers and its rapidly expanding on-demand programming options, cable may have the long-term edge once it debuts its built-in DVR in the next year, analysts say.
But for now, the myriad of choices will make it difficult for a clear winner to emerge, say analysts.
"I think what we see, there are a lot of people who want more and who want to pay for it, and there are some people who want vanilla," said Bruce Leichtman, an analyst with Leichtman Research Group in Durham, N.H.
Winners and losers
Michael S. Goodman, a senior analyst with The Yankee Group in Boston said, "TiVo is certainly not going to be the winner. That's for sure, because cable operators do not use branded DVRs." But Goodman did not want to brand cable the clear winner, either.
Some people will shun the new technologies altogether, Leichtman said. Of the nation's 67 million cable subscribers, 36 percent of them have digital service. Most still have analog cable boxes.
"I think we should be careful that everything is going in one place, anyhow," Leichtman said. "Certainly there has been evolution in the television environment in the last five years and there will be evolution in the television environment over the next 10 years."
The cable industry may have an edge as it has the capacity to pipe programs into your home over the cable wire. Satellite, which has been seen as the technology leader, may be losing its edge, analysts said. Satellite capacity can only stretch so far, so it offers DVRs as an alternative.
But Leichtman notes that the DVR has yet to catch on. Rather than being driven by consumer demand, Leichtman said, DVRs are selling as an add-on feature inside a cable TV box or sold with satellite service.
But there are predictions DVRs will become more widespread, growing from 3.2 million in use now to 5.8 million by the end of the year. The Yankee Group's Goodman said 24.7 million households will have DVRs by 2007.
"As a stand-alone device, people don't want it," Goodman said.
Comcast has been rolling out Video on Demand content over the past couple of years in New England, and took a giant step forward last week.
If you have a digital cable set top box, the service allows you to dial up a movie, programs, and other content any time of the day or night. Some of the content includes pay-per-view movies.
But Comcast fired a shot across the bow of the TiVo service, and thus its satellite partner, by offering New England viewers local news and public television programs on its Video on Demand service just minutes after they air. That makes Comcast's Video On Demand service look a lot more like TiVo.
But the choices are limited, for now. Of the area's major affiliates, only WCVB-TV Channel 5 offered its 6 o'clock news broadcast. New England Cable News is also offering programs. And Bruins playoff games had been offered until the team made a quick exit from the first round. A deal to punch up Red Sox games has not been reached.
But later this year, Comcast will up the ante. It plans to offer DVRs in set top boxes, said Marc Goodman, a spokesman. He could not say when the service would be available nor could he give a price. But Time Warner Cable launched a DVR in 2002 with customers shelling out $4.95 to $9.95 for the feature.
Comcast has 2.2 million New England subscribers, but would not say how many of those have digital cable. The challenge, Comcast officials said, has been just getting people to try the feature.
"Part of our biggest challenge in the last year, and it's starting to pay off, is getting people to recognize it's not something you have to pay for," said John Fouhy, director of sales and marketing in northern New England for Comcast.
In the last 90 days, 67 percent of Comcast digital subscribers have watched an on-demand show. The average on-demand viewer calls up nine shows a week.
"It's definitely been embraced by those folks," Fouhy said.
Prices are comparable
Kravetz likes TiVo because if she wants to record every show with Jennifer Aniston in it, no problem. She doesn't have to stay up to watch "Saturday Night Live" or the "Tonight Show." She gets all that for $12.95 a month.
And she likes TiVo's customer service, as the company regularly e-mails her or sends her messages, alerts her about program lineup changes and previews of shows she might like to watch.
"I just have a good feeling about them," Kravetz said. "They are terrific marketers."
But Goodman and Leichtman say TiVo may have a tenuous future, as it may be far too dependent on DirecTV, which has generated half of TiVo's 1.3 million subscribers. DirecTV is now owned by Rupert Murdoch, who owns a company with a technology similar to TiVo. The Yankee Group's Goodman said News Corp. could go with a private label DVR.
TiVo, in a statement in March, said it planned to spend $50 million to double its subscribers. It added 330,000 new subscribers during the holiday season, 200,000 of them as a result of its relationship with DirecTV.
"They have got a challenging model as a stand-alone product," Leichtman said. "They have a cult following, but as a stand-alone product, the cult following is not that large."
It's now up to consumers to decide whether they want to stick with the cable company or head out on their own and hook up a satellite dish, or even sign up with a service like TiVo.
Prices for the services on a monthly basis remain comparable. TiVo comes with a higher upfront cost to purchase the DVR device it works with, though it can be much cheaper than cable when combined with a digital satellite broadcast dish.
First, Comcast's rates vary by community. It offers standard cable in Lawrence at $43.25 a month, said Goodman, the Comcast spokesman. But to get Video On Demand viewers must get a digital cable, for about $10 more, a total of $53.70 a month.
Meanwhile TiVo lists the cheapest DVRs on its Web site at $149, including a $50 rebate, or $99 for refurbished units. A TiVo-enabled DVR at Best Buy in Salem, N.H., costs $129.99. And TiVo's subscription costs $12.95, or $299 for the life of the product.
Best Buy sales manager Rick Conte pointed out that a TiVo-enabled satellite receiver box costs $99, the hookup of the satellite dish is free and DirecTV service costs at least $39.99 for 130 channels.
DirecTV customers pay $4.99 for every DirecTV TiVo box in their home, which provides for 35 hours of recording.
"It just comes down to what people are willing to pay for," Goodman said.
Material from Bloomberg News and the Associated Press contributed to this report
TiVo Series2 60 hr
Upgraded 222 hr
TiVo Series2 40 hr
Upgraded 196 hr
TiVo Series2 40 hr
I did absolutely nothing and it was everything and more than I expected!
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