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Manufacturers and service providers are hoping that CES will begin the long-awaited explosion of the personal (or digital) video recorder (PVR) category in the U.S. market.
Once projected by analysts to produce DVD-like sales numbers, the hard-drive-based video-recording products thus far have been disappointments.
At the launch of the PVR category in the late 1990s, Forrester Research predicted 50 million PVRs in U.S. homes by 2005, but heading into this year's CES, the total U.S. market penetration was estimated at around 2 million PVRs.
Still bullish, Forrester Research recently revised its forecast to 30 million PVRs in the next five years, and even warned that the commercial skipping attributes of most of the devices will begin to negatively impact national television ad spending.
The Carmel Group has forecasted 24 million PVR households in the U.S. by 2007.
Throughout the industry, the PVR shortfalls have been blamed on an inability to adequately communicate the convenience benefits that PVRs offer, relatively high product prices, and the need in many cases to pay a monthly subscription fee for onscreen program guide services that are necessary to program the devices.
At the same time, early PVR adopters have also added digital television sets and monitors and are now anxious to upgrade to HDTV-capable PVRs as soon as they become available.
Some solutions to those problems were expected to come at this week's CES.
DirecTV, the direct broadcast satellite (DBS) provider, will look to build on its DirecTV PVR platform, which is powered by TiVo. Sister company Hughes Network Systems currently offers a next-generation DirecTV IRD/PVR (which it calls a Digital Video Recorder) based on TiVo's Series2 platform, offering more interactive entertainment options and an 80-hour hard-drive capacity. Other manufacturers were expected to announce similar products shortly.
EchoStar, the direct broadcast satellite (DBS) provider, will formally introduce a combination HDTV satellite decoder/PVR that it expects to deliver this year. Details on the device, such as hard-drive capacity and pricing, were not available prior to CES, but the company will be looking to use the device to gain subscribers in its ongoing battle with partner-turned-rival DirecTV and digital cable providers. JVC will also carry the new DISH HD PVR/IRD under its brand.
Meanwhile, EchoStar, which claims to be a leader in the PVR category, will also show an entire lineup of standard definition PVRs integrated into set-top IRDs.
SONICblue recently announced an aggressively priced line of DVRs in its ReplayTV 5000 series. SONICblue said it believes pricing that is more in line with other CE products was needed to "reach the inflection point." As a result, prices on ReplayTV 5000 series products started at $250 prior to the holidays. ReplayTV's lifetime fee is $250, and the monthly fee is $9.95.
Some ReplayTV devices are being challenged with lawsuits for their ability to automatically skip commercials and to send recorded programs to other ReplayTV owners via an Internet connection. That fight has been slow, the company acknowledged, but is not hindering its marketing plans for 2003.
TiVo, which has become a dominant brand name in the DVR category, announced prior to the holidays that it expanded distribution into Circuit City with its TiVo-branded 80-hour Series2 DVR. The model sold for $349 after a $50 rebate that ended Jan. 1. TiVo also sold a 60-hour model for $299 with rebate, and Sony sold an 80-hour TiVo model for $399 with rebate. Meanwhile, TiVo is establishing a foothold in the integrated digital cable box segment by offering a 40-hour TiVo DVR through Comcast (formerly AT&T Broadband). The cable operator sold its version to subscribers for $199 after rebate.
TiVo reported 510,000 subscribers after adding 46,000 net new subscribers during its third quarter, which ended on Oct. 31. The company said it expects to add between 450,000-600,000 subscribers by the end of fiscal year 2004.
TiVo customers can choose either a $249 lifetime service fee or pay $12.95 per month.
Prior to CES, TiVo announced its service would soon be able to store and playback on television screens data in both the MP3 music and JPEG still image formats. TiVo is expected to charge additional fee for the premium services.
TiVo will also be discussing new broadband and home networking capabilities for its services at CES. Other new capabilities will include the ability to program recording times away from home through a Web site.
Toshiba will unveil its first DVR following its recent licensing agreement with TiVo. The product, which Toshiba calls a Digital Media Server, will combine a progressive-scan DVD player and TiVo-based series 2 DVR with a tentatively planned 80GB hard-drive. Pricing and availability will be announced later.
Toshiba officials have said they are exploring future capability such as the storage and playback of MP3 music files and JPEG still images. Additionally, the company is looking at other DVR combinations including satellite receivers and DVD-RAM/-R recorders. Toshiba currently offers a combination hard-drive DVD-RAM/-R recorder but without the TiVo listing service.
Zenith plans to unveil its first combination ATSC set-top decoder box with a built-in hard-drive recorder capable of storing and playing back both standard and high-definition over-the-air broadcast programming.
This TWICE webinar, hosted by senior editor Alan Wolf, will take a look at what may be the hottest CE products at retail that will be sold during the all-important fourth quarter. Top technologies, market strategies and industry trends will be discussed with industry analysts and executives.