By Associated Press
ALVISO, Calif. (AP) - When TiVo Inc. introduced a high-definition digital video recorder last fall, it touted the long-awaited set-top box as a best-in-class product with a price tag to match.
But in a market already filled with lower-priced offerings from cable companies and other rivals, TiVo's $800 Series3 HD Digital Media Recorder had a hard time winning customers, even as throngs of consumers opened their wallets for high-definition televisions during the holiday season.
This year, TiVo hopes to widen its appeal with a more affordable model: the TiVo HD DVR for $299.99.
The Alviso-based company will begin taking pre-orders for it on its Web site Tuesday, and units are expected to hit retail outlets by early August.
"It won't suddenly unlock the door and sell millions," said James McQuivey, a vice president and analyst at Forrester Research. "But this seems like a good way to satisfy people who want the high-quality experience that TiVo is known for - with a product that will move off store shelves."
The TiVo HD DVR has many of the same technical features as its higher-priced Series3 cousin. It has two tuners, so subscribers can record two different shows in HD at the same time while watching a third, prerecorded show. It also has two built-in slots for CableCARD, allowing users to access digital programming without a separate device from the cable TV provider.
The new model will have a smaller hard drive - 160 gigabytes instead of 250 GB, storing about 20 hours of high-definition programming or up to 180 hours of standard programming. The device has an external hard drive port for expanded storage but TiVo officials say that feature won't be activated until later.
The less expensive model comes with a more basic remote control and sports an exterior less slick in design. You won't find curved, brushed metal edges and a liquid-crystal display; the new model uses a simpler dot-matrix-like LED-type of screen instead. It also lacks the high-quality audio and video certification from THX Ltd. found on the Series3 DVR.
Analysts expect the new product will be more attractive based on price.
"TiVo has a loyal customer base ... and we believe there will be demand from consumers to get rid of the cable box and old TiVo box for the HD solution," JMP Securities LLC analyst Ingrid Ebeling wrote in a client note in April, initiating the firm's coverage of the DVR provider.
"We're seeing a desire for HD everything," McQuivey said, "and it would have been a missed opportunity for TiVo to not introduce a more affordable product."
Although TiVo pioneered digital video recording technology, its stand-alone DVRs have struggled to compete against cable and satellite operators that provide DVR services at half the price or less than TiVo's monthly subscriptions. Furthermore, the rivals often lease the DVR set-top boxes to their customers for free.
A majority of the 33 million American households projected to have DVRs by the end of this year will get them through their cable and satellite TV providers, while only 5 million will get them through standalone machines like TiVo, Forrester Research said.
TiVo last reported in May it had 4.3 million subscribers. It also reported its first-ever quarterly profit for the three months that ended in April but forecast a return to a loss in the current quarter because of increased costs from an advertising campaign.
Wall Street analysts are looking for a sales boost from TiVo's deal with Comcast Corp., the nation's largest cable provider. TiVo's DVR service will be integrated into Comcast's set-top boxes, starting with a rollout in August in the New England area then expanding to other regions later.