ReplayTV rewinds business plan

ReplayTV, which made digital video recorders, reversed course Tuesday by saying it will instead license its technology to cable providers and other television-related companies.

ReplayTV's shifting strategy Anthony Wood, ReplayTV CEO

The company, whose devices use hard drives instead of videotape to record and pause live television, also said it will cut up to half of its 260 employees. A ReplayTV representative said the company expects to eliminate 100 to 130 jobs across all parts of the company.

As part of its strategic shift, ReplayTV said it has replaced chairman and chief executive officer Kim LeMasters. Company founder Anthony Wood will assume those roles.

In a related move, ReplayTV said it plans to stop making digital recorder hardware in the face of intense competition from a host of similar consumer products made by TiVo, Microsoft's UltimateTV and America Online's interactive TV services. Instead, ReplayTV will license its technology to set-top box makers and other TV companies, which can use the technology to offer digital video recording and video-on-demand services.

ReplayTV also hopes to offer targeted advertising, programming guides and e-commerce services.

The shift in focus away from the consumer sector comes at an awkward time--right as the holiday shopping season begins. But the new CEO emphasized that the company's strategic shift will not affect its customers, adding that it will continue to provide services for people who already own its digital recorders.

ReplayTV will stop selling its own brand of digital video recorders, which had been sold by Internet retailers such as Amazon.com and also directly to consumers by ReplayTV. However, Panasonic will continue selling its ReplayTV-based unit, dubbed the ShowStopper.

News.com's Ian Fried contributed to this report.