Chances are, dear media-savvy reader, you’ve heard of TiVo and itsmain competitors, UltimateTV and ReplayTV. Chances are you knowthat the two-year-old technology lets you record live television,pause and rewind even as a show is airing, store hours of it ontoa hard drive (while whisking through commercials uponplayback), and (in the case of the ReplayTV 4000) share showswith others, in a Napsterish fashion. And chances are you don’town one of these marvels.

There are currently more than a million digital video recorders,or DVRs, in use today. (Some 400,000 of those are TiVos.) That’snothing to sneeze at, but it’s nowhere near the 31 million DVDplayers in U.S. homes. Still, the technology boasts strong brandawareness — and TiVo, in terms of name recognition, can be fairlyconsidered the McDonald’s of the industry: Jennifer Anistonmentioned it on a recent episode of Friends. Conan O’Briencracked jokes about TiVo on Late Night. And last fall an entireepisode of Ellen DeGeneres’ ill-fated CBS sitcom was devoted toit. (EW parent AOL Time Warner has an investment in TiVo.)

Such high-profile branding is due in no small part to TiVo’sstratospheric popularity in Tinseltown. Each week, thecompany — which boosted its marketing campaign by ”seeding” unitsto showbiz types — fields product requests from writers, producers,and stars (including Will & Grace’s Eric McCormack and Sex andthe City’s Sarah Jessica Parker). And it’s paying off.

”Around Hollywood, there are…a lot more TiVo users than in thegeneral population,” reports media analyst Josh Bernoff ofForrester Research. ”A lot of [those users] write fortelevision. So references start showing up.” No kidding: In arecent one-month period, mentions of TiVo have surfaced on TheRosie O’Donnell Show, Late Show With David Letterman, The View,Today, and The Daily Show. But does visibility translate intoprofitability?

”We get a lot of people who ask, ‘Everybody thinks TiVo’s thegreatest thing since sliced bread — so why aren’t you sellingmillions?”’ says CEO Mike Ramsay, whose products first appearedon shelves in 1999. ”The first couple of years showed relativelymodest growth, largely [due to lack of] consumer education.People didn’t quite understand what it is. They rely more on wordof mouth than advertising.” A competitor, Microsoft UltimateTVexec Rob Schoeben, concurs: The ”consumer education stage” isstill evolving. ”The concept of the VCR really slowed down theadoption of the DVR,” he explains, ”because originally the VCRwas going to allow people to record programs…[to view] later.”

But so-called time-shifting was quickly supplanted by theexplosive growth of home-video rentals. Fast-forward 25 years:Thanks to DVR, time-shifting has suddenly become easy,convenient, and, dare we say, sexy. Which partly explains DVR’soverwhelmingly positive response from the early adopters (thesame techno-forward folks who buy iPods, use BlackBerries, andmade DVD a family-room staple). ”There’s practically a zero rateof return for people…once they’ve started [using a DVR],” saysanalyst Bernoff.

It’s easy to see why: DVRs represent a substantial improvementover the conventional TV/VCR combination. For starters,navigation is essentially point-and-click — the interface iscompletely visual, Web-intuitive, and mouse-free. There’s nogrowing cross-eyed locating fingernail-thin buttons, no flashing”12:00” to remind you of your techno-ineptitude. Secondly, thehard drives are spacious enough to accommodate 30 to 40 hours ofprogramming — or hundreds, in the case of ReplayTV. If, forexample, you’d like to record Starsky and Hutch reruns everyweek, simply select the program from a menu (which lists currentand future scheduling info) and indicate you’d like it recordedevery week. Voila! — you’ll never have to think about it again.Some newer models (such as the UltimateTV receiver) will even letusers keyword-search a week ahead for, say, any movie starringRobert De Niro or infomercial featuring Ron Popeil. And with theDVR, multiple playbacks don’t mean a decline in picture quality.

Best of all, DVRs make skipping commercials (on prerecordedprogramming) a real cinch. Which, understandably, hasentertainment-industry executives — especially those at theadvertising-dependent networks — reaching for their Zantac. NotesBernoff: ”Whereas now approximately 4 percent of all TV viewingis [viewer controlled] — and most of that is DVDs andvideocassettes — we’re estimating that…by 2005, almost 30percent of viewing will be on demand. For advertisers, this is abit of a problem.” That means nearly a third of the country’stotal viewership could slip out of advertisers’ reach — and makeit a lot tougher to gouge advertisers for airtime. That’s badnews for the already cash-strapped networks.

Not surprisingly, the industry has gone on the offensive: WhenSONICblue introduced its ReplayTV 4000, 28 separate corporateentities (including NBC, Viacom, and AOL Time Warner) filedofficial complaints. Among their gripes: an Autoadvance featurethat automatically forwards past commercials in recordedprogramming, and a function that allows Replay users to swap TVshows like MP3s. ”We don’t feel we’ve done anything illegal,”says Replay founder Anthony Wood, who notes that Autoadvancefeatures are already available on some VCRs. The suits, filed inLos Angeles federal court, have no trial date at present.

For his part, Bernoff wasn’t surprised by the courtroomwrangling: ”You really want to make somebody in Hollywood jump?Just stand behind them and whisper Napster.” (Like the musicexecs who were bedeviled by the popular file-sharing service, theTV and movie industries are understandably worried about the lossof revenue from unauthorized use of copyrighted material.) ButBernoff doesn’t think these legal hurdles will stop theproliferation of the technology. As for the future, he offersthis anecdote: ”My [6-year-old] daughter has been watchingprograms on a personal video recorder for her entire TV-viewinglife. One day, she and I were sitting on the couch when acommercial came on. And she said, ‘Daddy, skip the commercial.’ Isaid, ‘I’m sorry, honey, I can’t.’ She asked, ‘Why not?’ I said,’This is live TV.’ And then she looked at me and said, ‘Daddy,what’s live TV?”’




All DVRs are not created equal: Some work only with satellitesystems, some work with everything from cable to goodold-fashioned rabbit ears (so-called stand-alone units). Moreexpensive units typically have more storage space and features.(Also, storage-time estimates are tied to playback quality,i.e., lesser quality means more hours; always check with yourretailer.) Here’s a rundown of current set-top systems. — SB

TIVO TYPE Stand-alone and satellite-integrated (DirecTV) PROS Series2offers 60-hour recording capacity and a versatile remote; SeasonPass feature automatically records favorite shows. CONS Onstand-alone, you can’t record one show while watching another.COST $399, $9.95/month added to your satellite or cable bill FORMORE INFO

MICROSOFT ULTIMATETV TYPE Satellite-integrated (DirecTV) PROS Records up to 35 hours;picture-in-picture window allows you to record one show whilewatching another; user-friendly search engine. CONS Onlyavailable via DirecTV satellite system; Microsoft’sreorganization of its TV division makes upgrades a murkyprospect. COST From $199 (plus subscription to DirecTV), anadditional $10/month to your satellite bill FOR MORE

REPLAYTV TYPE Stand-alone PROS Compatible with any TV system; no monthlyfee; stores up to 320 hours of programming; allows users towatch one program while recording another CONS Expensive; filesharing is very slow. COST $699-1,999 FOR MORE INFO

THE DISH PVR PROS No added monthly fee; all-digital satellite TV and DVRservice CONS Available only via the Dish Network satellitebroadcasting system; can’t yet watch one program while recordinganother. COST $399, which includes Dish Network FOR MORE