Copyright 2003 The San Diego Union-Tribune

The San Diego Union-Tribune

June 24, 2003, Tuesday

From LexisNexis

Imagine watching your favorite television shows when you want to, not when a network puts them on the air.

For years, subscribers to digital video recording services such as Tivo have been able to defy program schedules by recording and watching their favorite shows at their leisure. But while Tivo has garnered a devoted customer base, it has yet to become a mainstream success.

That might be about to change. Time Warner Cable is launching its own brand of DVR service in San Diego starting today.

The service is similar to that of Tivo and other DVRs in which subscribers can record up to 40 hours of programming and watch it at any time. Customers can also record two shows at a time, watch two shows simultaneously, and even pause and rewind live television shows. Unlike video recorders, which use tape, DVRs store the information on computer hard drives.

The backing of cable giants like Time Warner might mean that the time has come for DVR technology to take off.

"As it gets rolled out, especially by the cable companies, DVR technology is going to become incredibly popular," said Mark Kersey, an industry analyst with ARS Inc., a market research firm in La Jolla.

The sheer number of cable TV subscribers is not the only reason DVR adoption will begin to grow, Kersey said. The DVR products that cable companies are offering are less expensive.

With Tivo, consumers shell out about $250 as well as pay a monthly fee of $13. Time Warner plans to charge $10 a month for the DVR service on top of its rate for digital cable. Those who are already digital subscribers can upgrade their set-top boxes for free. With Time Warner's service, the DVR is built into the cable TV box.

"You can argue that Tivo hasn't been more successful — despite the fact that people love it and can't live without it — because of its high cost," Kersey said.

Time Warner is not alone in offering the service. Cox Communications, the county's other major cable provider, plans to launch a similar service before the end of the year. Dan Novak, vice president of programming and communications for Cox's San Diego operation, said DVR is going to become a must-have technology, comparing it with high-speed Internet service.

"Once you experience it, it's pretty hard to go back," he said.

Novak couldn't disclose how much the Cox service would cost, but in other markets, the company's monthly fee has been about $10.

"It's safe to say you won't have to pay for the equipment," Novak said.

Cable companies are already playing a heavy game of catch-up to their satellite competitors. DirecTV has long offered a Tivo machine with its service, while the Dish Network has its own proprietary DVR technology.

Kersey said cable companies took a wait-and-see approach, as Tivo and other DVR technology struggled to make inroads with consumers. Tivo, for instance, has about 700,000 subscribers, most of them DirecTV customers.

"The people who have Tivo love it, but the number of people who have Tivo is still fairly small," Kersey said. "The cable companies weren't sure if there was really a market there."

Tim Traynor, vice president of DirecTV, said the problem has never been with the technology but with how to market DVRs to the average consumer.

"It is not so much confusion but a lack of awareness about the technology," Trainer said. "Getting someone over that knowledge hump has been the real challenge."

To make consumers aware of the service, Time Warner plans to air ads as well as highlight its DVR in its customer newsletter. In addition, it will educate subscribers on how to use the system on its Answers on Demand channel, which attempts to address common questions and concerns.

But Dan Ballister, vice president of public affairs for Time Warner's San Diego operations, said consumers seem to be ready for DVRs. There are already 1,500 Time Warner customers in San Diego on the waiting list. In other markets where Time Warner has launched the service, close to 15 percent of customers have signed up for DVRs. "This will really help set us apart from our competitors," Ballister said.

But not all DVRs are created equal, said Bob Poniatowski, product marketing manager for Tivo. He said Tivo allows consumers to do more than the service offered by cable companies. Tivo allows a subscriber to easily record all the programs with a specific actor or search out a favorite television show whenever it airs. If someone is interested in kayaking, Tivo finds and records all shows that relate to that subject, Poniatowski said.

"These dumbed-down DVRs just don't do as much as Tivo," he said.

Don Williams, director of engineering for Time Warner in San Diego, said cable companies will help grow the DVR business. For the average consumer, Tivo was difficult to comprehend and also required that the subscriber invest in equipment, and there was a question if the upstart company would last, he said.

"Now you have cable companies that have a long reputation in the community, investing in the equipment," Williams said. "It's a little easier sell."