March 29, 1999 11:15 AM PST

New TV recording devices due soon

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A new breed of digital VCRs is set to ship from startup Tivo and its partner Philips Electronics, while its competitor in this fledgling market, Replay Networks, announced some heavyweight financial backing.

Tivo said today that See special report: When worlds collide digital set-top TV recording devices made by Philips will officially launch later this week. The boxes work in conjunction with Tivo's service.

The Philips device acts like a souped-up VCR. It lets users pause, rewind, and play back television programs, and it also seeks out programs that the viewer might want.

Meanwhile, Replay Networks, which offers a similar device and service, said today that it had received an $8 million investment from Kleiner Perkins Caufield & Byers, which is now lead investor in the company. Vulcan Ventures, Microsoft co-founder Paul Allen's investment organization, and Tribune Company also will be participating in the new round of funding. Vulcan also invested an undisclosed sum in Tivo earlier this year.

The news serves to highlight the growing presence of PC technologies such as hard disk drives and MPEG-2 video compression chips in consumer electronics devices--and how serious venture capital investors are about the existence of a market for digital information appliances that lies outside of the mainstream PC market.

Both Tivo and Replay are targeting TV users, and aren't offering Internet access through the devices a la WebTV, although both systems download programming information via a built-in modem.

"We see Personal TV as a logical extension of our global leadership in products that support the TV experience," said Clifton Foo, director of marketing with Philips Electronics.

Replay, for its part, continues to add some high-profile names to its board of directors. The company said Kleiner Perkins partner William Randolph Hearst III will now sit on the board of directors, which already includes Netscape co-founder Marc Andreessen and former Compaq senior executive Kevin Bohren.

The tale of the tape
Meanwhile, Sony and JVC, a subsidiary of Matsushita Electric Industrial, are taking a slightly different tack on the same market. The two are expected to announce that they will develop a digital home-use video player system "for the network age."

The two companies will develop digital VHS players that can directly access the Internet, according to the Tokyo Shimbun newspaper. The VCRs will be able to record digital satellite broadcasts as well as analog television programs, and could also be used to store date other than video, the report said.

Both Tivo and Replay store information on hard disk drives, whereas a digital VHS recorder stores information in a linear fashion on magnetic tape. In general, hard disk drives can access information more quickly than tape-based storage devices.

Tivo said the Philips "Personal TV" receivers are available in two Configurations. A model that can record 14-hours of programming will be priced at $499, while a 30-hour model will be priced at $999. Subscription to the service will be priced at $9.95, $99 per year, or $199 for a lifetime subscription.

Initially, the Philips device will only be sold directly to consumers via a toll free number or the Internet. By this summer, Foo said Philips will extend sales through traditional retail outlets, supported by a large advertising campaign.

Later, Philips plans to work with DirecTV to incorporate the technology into satellite set-top receivers.

Replay Networks has yet ship its device or sign up a mass market consumer electronics manufacturer, although a spokesperson said the company expects to have a deal in place by April, when the service is slated to start.

Paul Allen's Vulcan Ventures is an investor in CNET: The Computer Network, publisher of News.com.

Bloomberg contributed to this report.

 

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