Audio Video News

Personal video recorder pioneer ReplayTV has decided to abandon the product category it co-created last year with competitor TiVo, Inc. The Mountain View, California-based company will concentrate instead on licensing its technology to cable providers and hardware maanufaturers for inclusion in a new generation of set-top boxes.

The change in direction was announced only two weeks after ReplayTV opened Replay Studios, a branch of the company created to develop original content and streaming video productions. ReplayTV CEO Kim LeMasters has resigned and been replaced by Anthony Wood, a current ReplayTV board member and former chief executive and chairman. ReplayTV's new business emphasis is "outside my background and interest," LeMasters said. The management restructuring presages a cutback in the ReplayTV workforce; hardware engineers and marketing specialists are expected to take the brunt of the job cuts.

Early in 1999, both TiVo, Inc. and ReplayTV brought out hard disk-based video recorders with an attractive array of programmable features and long recording capacity. The launch of the new product category was expected to wean TV viewers away from the ubiquitous VCR. ReplayTV's plan was to establish its own "network" of viewers, who would receive advertising inserted in Replay's transmissions, and whose preferences would be tracked via interactive features in the ReplayTV PVR, for the ultimate goal of highly targeted marketing.

Almost two years into a venture bolstered by an exhaustive and very expensive television advertising campaign, ReplayTV has reportedly sold only about 30,000 units, according to analyst Josh Bernoff of Forrester Research. TiVo, whose functionally identical box sells for $200 less, has sold about 75,000---compared to approximately 11.8 million VCRs sold in the first half of this year. Although both companies' machines are capable of recording several hours of video at better than VCR quality, as well as allowing viewers to pause live broadcasts, their market acceptance has been limited by users' inability to transfer recordings, and by complicated menu structures and hook-up configurations. Like satellite receivers, PVRs must be connected to telephone lines in order to work—and to relay information about how they are being used.

In what was clearly an overly enthusiastic view of PVRs' potential, Forrester Research had predicted that more than 800,000 of the devices would be in consumers' homes by the end of 2000, with that an expected growth to 53 million in 2005. As of December, only TiVo is still making and selling the machines.