Copyright 2003 Knight Ridder/Tribune News Service

Knight Ridder/Tribune News Service

San Jose Mercury News...01/09/2003

Lexis Nexis

TiVo makes a move to take the lead in the battle to control the high-tech living room as it announces Thursday a handful of new services at the Consumer Electronics Show in Las Vegas.

The San Jose, Calif., company, whose brand name has become synonymous with digital video recording, says it will launch networking capabilities in spring to allow owners of a TiVo Series2 recorder to access photo, video or music files stored on networked computers and play them through a television, via the existing TiVo box.

The race to become the digital core of the home entertainment center pits TiVo against fellow DVR maker Replay TV and industry behemoths Microsoft and Sony. Cable TV providers want their own place, too, with the cable box as the controlling node.

Microsoft, with its Windows XP Media Center Edition operating system, has been pushing to get personal computers into the living room for months. Sony, with its own brand of software, introduced similar technology well over a year ago.

But both of those offerings have a major flaw: They rely on the personal computer and require that it be housed in the living room. That's something most consumers still aren't willing to do.

TiVo announced a service that would allow the recording of high-definition television programs in that format, as opposed to being recorded in analog.

"HDTV has arrived and our consumer electronics partners have been eager to incorporate a TiVo HDTV DVR into their digital receivers," said Mike Ramsay, chief executive of TiVo.

"This is an important step in DVR technology that will give our licensing partners the ability to offer their consumers an HDTV platform DVR with the TiVo service before the end of the year," he said in a statement.

The company said the HDTV format DVR is one of the new products most frequently requested by technology licensing partners, as well as TiVo subscribers.

The announcements intensify the battle to see which format—computer, digital video recording, video-on-demand technology or video game units—will dominate as the living room television set becomes the center of all household entertainment content.

"They're all chasing the same kind of concept," said Rob Enderle, analyst with the Giga Information Group, a Santa Clara, Calif., research firm.

Thursday's announcements could put TiVo in the lead, Enderle said. TiVo units already are housed in the living room and connectivity to the computer—whether it's a PC or a Mac running on a hard-wired or wireless network—only makes it more attractive to the user.

Connecting a TiVo box to a computer via a network would bring the Internet to the TiVo. It's a positive sign for the company, which has been struggling with profitability as it works to sign more subscribers. During the third quarter of 2002, the company signed 46,000 new subscribers, bringing the total to about 510,000.

"This can help them but the battle is not over yet," Enderle said. "It allows them to go slightly ahead of their competitors in this type of market, where price isn't everything and you're considered the standard. You want the other guys to chase you, not the other way around."