Comcast sets sights on DVR market

But the devices, which record shows onto a computer-style hard disk and allow individuals to pause and rewind live television, have been slow to win the hearts and dollars of consumers despite a cultlike devotion.

On the market since 1999, only 3.8 million of the devices will be in U.S. households by the end of this year, according to the Yankee Group, compared with more than 90 million VCRs.

That may soon change, experts say.

By the end of the year, Comcast Corp. will begin providing Sacramento, Roseville and Stockton customers with a cable box that includes a built-in DVR for $9.95 a month.

The cable industry’s foray into DVRs is seen as a way to blunt gains made by their satellite competitors, which have been offering DVR-equipped satellite receivers for more than three years, said Mariangela Bisi, an analyst with the Carmel Group in Carmel.

“DVR has been a big differentiator for satellite, and once people try DVRs they can’t go back,” Bisi said. “Cable is just desperate.”

Nationwide, cable subscription growth has stalled at about 65 million households, Bisi said, while satellite will grow by about 2 million subscribers this year to 21.3 million.

In California, about 2.3 million households subscribe to satellite television, according to Media Business Corp., which follows the cable and satellite industry. That compares with nearly 8 million cable television households.

Comcast officials won’t disclose their market share in the Sacramento area, other than to say the subscriber base is increasing, primarily due to the region’s booming population.

In the DVR arena, Comcast is facing aggressive foes.

Satellite broadcaster Dish Network, which has sold more than 1 million DVRs, is offering Sacramento subscribers a free DVR, and its major competitor, DirecTV, has cut the price on its TiVo-made DVRs to under $100.

TiVo, the industry pioneer with about 800,000 DVRs sold, has cut the price of its stand-alone boxes to under $200. And ReplayTV is courting high-end customers with a device boasting a massive 360 hours of recording time — the equivalent of 120 NFL games.

Even big consumer electronics companies such as Toshiba and Pioneer will be selling combination DVR-DVD players during the upcoming holiday season.

Others are joining the DVR parade, as well. Sony just unveiled a gaming console with DVR capability for sale in Japan, while Microsoft’s new Media Center software also includes DVR technology for personal computers. With all that exposure and falling prices, consumers may finally be persuaded to give DVRs a go, said Adi Kishore, an analyst with the Boston-based Yankee Group.

“Ninety-seven percent of TiVo customers recommend it to their friends,” Kishore said. “It’s just a matter of getting the customer to try it out. We anticipate high customer satisfaction.”

Analysts say DVRs have been slow to take off because the industry has had trouble convincing consumers the technology is superior to VCRs. That’s even though DVR users can pause and even rewind live television broadcasts, never have to juggle tapes, and can schedule recordings by pressing a single button on their remote control.

As the dominant cable company in the region, Comcast, analysts say, could provide a major boost for DVR acceptance in the Sacramento area. (Interested customers who send e-mail to sacramento_dvr@cable.comcast.com will be notified when the boxes are available.)

When the company begins sending out its DVR-equipped set-top boxes later this year, it will have more marketing clout than satellite providers or consumer electronics stores that sell stand-alone DVRs from TiVo and ReplayTV.

That’s because it already has a relationship with more than 600,000 subscribers in the Sacramento, Roseville and Stockton areas. An additional advantage for Comcast is that customers won’t have to add another box to a pile that likely includes a VCR and a DVD player.

“A lot of consumers are … tired of stacking more boxes by their TV set,” said Phillip Swann, who publishes the TV Predictions newsletter. “They can now get a DVR in a cable box.”

Comcast officials think their new DVR box, made by Motorola, will be a compelling offering, allowing customers to record about 50 hours of programming.

Like many DVRs, the Motorola box will let users record a show by finding it on the on-screen program guide and clicking a single button. The technology allows users to watch a show from the beginning, even as it’s being recorded. So users could, for instance, begin watching a Kings game at 8 p.m., even though it started at 7 p.m.

Unlike products from TiVo and ReplayTV, the Comcast box won’t let users record two shows at once, but Comcast regional Vice President Ruth Blank said a dual-tuner model will be available early next year.

There’s one area where Comcast may have an edge: Its box will record a high-definition television broadcast, though only about six to eight hours’ worth because high-definition consumes about eight times more space on the hard disk than regular broadcasts.

DirecTV will release an HD-compatible DVR next year with 30 hours of capacity, but hasn’t yet set a price. The Dish Network’s HD-ready recorder comes out next month with 25 hours of HD capacity and an equally hefty price tag of $999.

Some analysts say cable’s entry into the DVR market spells trouble for companies like TiVo and Replay. But those firms counter that their devices have many more features than the their cable counterparts, such as sophisticated program searches and the ability to stream photos and music from a computer to a television set.

But some analysts wonder whether that will be enough to beat back the tide of cable. “TiVo has the bells and whistles, and cable’s not as good at that,” said Swann of TV Predictions. “But it’s unknown how important that will be to users.”

One feature that DVR devotees seem to cherish is the ability to turn on the television 10 minutes after the start time, zip through commercials and finish the show just about the time their neighbors do on conventional television.

When DVRs first hit the market, programmers shuddered at the prospect of a nation of viewers who would never watch commercials.

But that fear has subsided a bit — partially because of DVR’s slow growth, and partly because many box manufacturers have opted for traditional fast-forward buttons rather than a feature that skips forward every 30 seconds.

“It’s less of an issue because it’s not available on a lot of devices,” said Kishore, the Yankee analyst.

The new Comcast box, for instance, has fast-forward rather than commercial skip. That could be a concession to the parent company, which is an investor in several channels, including the E Network and the Golf Channel.

But Blank of Comcast said customers who want to skip commercials can easily do so, with the fast-forward button. “The functionality is there,” Blank said. “It’s just a different way of doing it.”

Source: Sacramento Bee

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