ReplayTV primes bow of souped-up recorder

New DVR can store as much as 320 hours of TV programming

HOLLYWOOD — Less than nine months after pulling out of the consumer market, digital video recording company ReplayTV is planning a major comeback with a revolutionary new product.

ReplayTV is planning a post-Labor Day introduction of a souped-up DVR that could store as much as 320 hours of TV programming and send programs by email to other DVRs. It may also allow users to copy photo files from a PC to the DVR.

The Oregon-based company may once again fuel controversy among advertisers with a function that automatically eliminates commercials during the recording of programs. The previous version of ReplayTV included a button enabling viewers to fast forward through commercials 30 seconds at a time, sparking angry reactions from networks and their advertisers.

According to Replay, which was sold to digital audio device company Sonicblue in February for $120 million, no final decisions have been made about the components of the new product. Company is providing demos to media outlets under embargo and preparing to do the same with investors, including many TV networks and entertainment companies, once plans are finalized.

News of the new product was revealed by Replay in a recent email survey to visitors to the ReplayTV.com Web site. Recipients of the email survey were asked not to forward the message.

Survey describes in detail the new product and asks respondents how much they would be willing to pay for it. Pricing proposals in the survey range from a model with 40 hours of storage capacity that could retail for $699 to a 320-hour model that might sell for $1,999.

Current DVRs from Replay, TiVo, Microsoft and EchoStar that store from nine to 60 hours of programming range in price from $200-$900 and offer various options such as built-in satellite receivers and Internet connections. There are fewer than a half-million DVR devices in consumer homes.

According to the email survey, the product could work with a standard dial-up phone modem for a monthly fee of $4.95 or a broadband Internet connection using an Ethernet home network at no monthly charge. The broadband connection is required for sending TV programs by email.

Change of plans

Last December Replay announced that it was pulling its planned public stock offering and withdrawing from the consumer electronics market in favor of licensing its technology to cable, satellite and Internet companies to use as a component in other devices. A source at Replay said that under Sonicblue, Replay is returning to its original consumer electronics product strategy while continuing to license the technology.

Many major media companies invested in Replay in 1999 and 2000, including News Corp., Time Warner, the Walt Disney Co., NBC, Showtime Networks and what was then Universal’s parent, Seagram. Other entertainment company investors in Replay include Sega Enterprises, Paul Allen’s Vulcan Ventures, satcaster EchoStar Communications, Tribune, Liberty Media Group and cablers Adelphia Communications, Shaw Communications, Rogers Communications and Comcast.

Also investing in Replay were high-speed cable modem service Excite@Home and consumer electronics and set-top box manufacturers Scientific-Atlanta, Matsushita’s Panasonic brand, Sharp Electronics and Matsushita Kotobuki Electronics Industries.

Nets not worried yet

Network execs didn’t want to talk on the record about Replay’s plans until they’re officially announced. But privately, most seemed unconcerned about the company’s latest advances — for now.

For example, some officials believe the networks will be able to outwit Replay’s anti-commercial device.

“There is no scheme to differentiate between programs and commercials that is not defeatable,” one senior network exec said.

While Replay has not spelled out to network honchos how it plans to zap commercials, network types believe the company will likely try to have its machine read certain codes networks currently embed in signals that indicate a commercial break is coming up. If that’s the case, “As soon as (Replay introduces its machine), we would stop doing that,” an exec said.

As for the emailing of programs, execs aren’t sure whether such an action would be different from a consumer sending a videotape to a friend.

“It’s one thing to pass along a video. It’s something else to let one person pass along a program to hundreds of people at once,” a network insider said. “That could be a violation of our copyright.”

Webheads point to Replay’s past business failures and the relatively slow penetration rate of digital recorders as a reason for their current lack of concern.

“Everyone said the VCR would kill network TV,” one exec said. “I don’t think people are shivering over this.”

(Josef Adalian contributed to this report.)

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