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LAS VEGAS—"Other video devices (videocassette recorders, digital video recorders such as hard drive and DVD recorders, etc.) that receive television signals — 100% of all such units must include DTV tuners effective March 1, 2007."
With these few lines in "Second Report And Order" issued by the Federal Communications Commission in November 2005, the government shook up digital video recording and may have finally killed the stand-alone VCR.
The ruling — part of the DTV tuner mandate — is forcing manufacturers to revamp their consumer recording lineups for 2007 while others are simply leaving the field altogether.
Combo VCR/DVD players/recorders may not be the "coolest" electronics on the block but they make up a lot of units and dollars. According to CEA close to 3.3 million combos shipped in 2006 but — hold onto your hats — in 2007 this will drop to 600,000. Revenues will plummet from $285 million to $48 million. Meanwhile overall DVD recorders will grow from 7.1 million to 13.4 million, with revenues rising from $1.3 billion to $1.9 billion as the final migration from tape continues.
Manufacturers are dealing with the mandate in a number of ways but many are following a two-pronged approach. They will offer recorders with tuners and less expensive models without. How consumers react to this "is the million-dollar question. We're hoping that effective communication will help prevent a lot of returns," said Maria Colon, senior product manager, Samsung, a company ranking third or fourth in combo market share, "depending on the month," Colon said.
According to Tim Alessi, product development director, LG Electronics, his company is also taking a two-pronged approach — recorders with and without tuners.
At CES LG will show the Super Multi DVD recorder/VCR combo (RC797T) that includes a digital/analog tuner, support for recording to all blank DVD disc formats, a set-top box controller and USB media host, among other features. The RC797T has LG's fifth-generation VSB digital/analog tuner.
Additional models include Super Multi DVD recorder with digital tuner (DR787T), Super Multi DVD recorder (DR700N) and Super Multi DVD recorder/VCR Combo (RC700N) both without tuners. The digital tuner DVD recorders incorporate a USB media host port that can play MP3, WMA or JPEG music and photo files. Under the Zenith brand, they're introducing the XBR716 and DVD player/VCP (XBV713) without tuners. Prices will be announced at the show.
Panasonic is taking a different approach with the four DVD recorders and combo units it'll unveil at CES.
"All of the new models will have combination analog/digital tuners. We've heard other manufacturers are offering tuner-less models. We feel that's not the right thing for our customers," said Gene Kelsey, VP Entertainment Group. "People like to watch something on one channel and record on another. It's what the whole time-shifting experience is all about. By not including a tuner we're limiting consumers' options."
Once the current inventory sells through, Panasonic will transition to new tuners for its DVD recorders and combos. Kelsey said Panasonic will not incorporate this new tuner in its VCRs. Once the carryover deck sells out, Panasonic will leave the VCR category "after 30 years of amazing business," he said.
Panasonic's new recorders with Super Multi Drives include the DMR-EZ17 ($229 suggested retail) and the DMR-EZ27 with HDMI up-conversion ($279). The VCR combos also include Super Multi Drives while the step-up offers HDMI up-conversion (DMR-EZ37V, $329 and DMR-EZ47V, $379).
"All of Toshiba's TV combination models with tuners that will be shipped to dealers beginning March 1st require that tuner to be digital, as per the FCC mandate. We will be supporting NTSC/QAM/ATSC tuners in all of our TV combination models," said Jodi Sally, Toshiba A/V products marketing VP.
She said that like other manufacturers Toshiba will be marketing DVD recorders with and without digital tuners. "Since approximately 80 percent of U.S. homes today subscribe to cable or satellite, we feel that tuner-less DVD recorders and DVD/VCR models can represent an excellent value to consumers."
For JVC, inventor of VHS in 1976, CES 2007 marks the end of an era. Once the current standalone VHS and S-VHS decks sell through, the line will fade away said Allan Holland, national product manager, JVC Video.
"We will market a VCR/DVD combo that's tuner-free as well as one with a tuner. Given the current low combi prices we felt consumers wouldn't spend the extra premium for the ATSC tuner so we wanted to offer a choice. Since over 90 percent of consumers use some type of set-top box, our new models will have Timer Link that works with the on/off timer found in 96 percent of the STBs out there."
The DRMV77 (sans tuner) ships in May with a $249 suggested retail. The DRMV99 with ATSC tuner is $329. They will continue selling the HM-DT100 D-VHS deck with ATSC tuner that's been on the market several years.
LiteOn has a different approach. It's simply leaving the branded DVD recorder combo business. Once our inventory is gone, we will concentrate on our OEM business," said Christine Hsing, marketing manager.
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.