Technology Investor

Friday, March 31, 2006

RS-DVR vs. TiVo

I am not sure why some people are even making a comparison between a new "service" offered by the cable company (with absolutely no proven marketability), to a product that has been around for years and is loved by everyone who owns it.

Who says customers will even want this service? It is quite an assumption to make that cable customers will flock to this, and Tivo owners will throw away their boxes, and jump on another cable company add-on service.

Subscription fee is not an issue; the RS-DVR service will cost about $10/month; the only difference is who gets the money. So the real question becomes "Which is a better product?"

Is everyone really THAT happy with the added-cost services the cable company is currently offering? Is everyone thrilled with the quality of service from their cable company?

I, for one, do not want my media library stored at the cable company. When I sit down to watch a program, I want that content in my house. Think about it, in order to access YOUR recorded shows, you need to be physically connected to the cable company. Of course we all know that connection is 100% reliable. Further, I want to be in control of my own content. The company even stated "Cablevision sees the obvious advantage of having a personal video recorder that it can control from within its network..."

Now wait a minute, with TIVO I have all my recorded shows in my house and I control them. I can watch anything I want without being wired. Now, how can your service be better and worth the same price?

Of course, we all know how "feature-packed" the current on-demand services are. Actually, they are slow, awkward and I often find myself wishing I could do something that I cannot. I can imagine a similar experience trying to control your “virtual DVR” using your cable remote.

Let's face it, the TIVO features blow away anything else available, and anyone who has used one will not give it up. TIVO's patents protect many of these features so the cable company cannot copy them, or risk paying TIVO millions for infringement down the road.

Comcast backs RS-DVR, of course. That way they can keep the whole $10 instead of splitting with TIVO. The problem is that the (client side) TIVO is a much better solution that the server based RS-DVR, so there will be little market for the latter. Comcast will also be releasing their set-top DVR box with TIVO licensed software later this year, well before any possible RS-DVR solution. I don't think any TIVO user will be convinced to convert.

I called Comcast and asked when the Tivo box would be out, and they could not give me and answer other than later this year. I asked how many other people were asking about this and she said "I get this question every day". So the demand is there.

Of course Comcast does already have their own DVR box out there but I have seen it and it is no TIVO. I don't know if they were just lazy or were worried about stepping on TIVO's patents when they designed this box.

The more cable company DVR boxes out there the better for TIVO. They do not look at these as lost customers; they are actually all future customers. The TIVO/Comcast license is for the TIVO software only, and can be offered as a software "upgrade" to all existing cable DVR subscribers. This is a best case scenario for TIVO as licensing revenue is all profit, no overhead. They will be collecting monthly fees for the customers the cable company sells, and with no hardware costs. What a great model.

The final problem with RS-DVR is the, still unaddressed, potential copyright issues. The entertainment industry is holding off for now but if you recall, they came down hard on Time Warner two years ago when they launched the "Mystro" service, which was the same as Cablevision's solution with the exception that the cable company was the one instigating the recording instead of the end consumer. As a result of the legal pressure, the Mystro service was abandoned.

Although Cablevision assumes they are covered under the same rulings that protect end users from "time-shifting" their programming, it is far more likely the entertainment industry will take this up (legally) with cable companies because it is much easier to go after one "distributor" of copied content than it is to go after the millions of end users doing the copying (e.g. Napster).

Cablevision plans to protect itself from this legal action in two main ways; User controls recording through remote control from user's location; and restrictions are placed on the amount of storage so users cannot just record everything.

Additionally, they may need to encrypt the content or embed digital rights protection so that they are not seen as "broadcasting" the programming, which would present a huge legal problem.

Well, here are two more reasons I do not want this service. By controlling my own media library on my device, I say what and how much I can record, and my storage is only limited to by the size hard drive(s) I want to buy.

... Oh and what if the hard drive on the cable company's server crashes? Are we going to count on some cable employee schmuck to have backed up all our shows and movies?

I don't know about you, but I don't want this service... at the same price or any price.




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