September 13, 2006 4:00 AM PDT

TiVo makes HD leap, but at a steep price

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When the TiVo aficionado and blogger MegaZone was offered a review unit of the new high-definition TiVo Series3, he didn't just jump at the chance, he went out and bought a new television to use with it. And not just any TV--he bought a 61-inch, flat-screen HD behemoth.

Clearly, this isn't a guy who would think the $799 price tag for TiVo's new digital video recorder is a turnoff.

"I'm a geek and an early adopter--I paid over $700 for my (Pioneer) DVR-810H, so $800 for the (Series3) isn't out of reach. Heck, I paid $1,700 for my first DVD/CD/(laser disc) system...many years ago because DVD was new," MegaZone wrote in an e-mail interview with CNET News.com.

TiVo Series3
Credit: PHOTO TiVo
The new TiVo Series3 high-definition
digital video recorder.

As for the rest of us, TiVo newbies might experience a little sticker shock when pricing the Series3. At $799, that's a significant jump from even the most expensive Series2 TiVo DVR, which tops out at $399. But TiVo has its eye on deep-pocketed consumers and hardcore videophiles who are already dropping serious money for HD televisions.

"Clearly it's not a mass-market price point. However, the hardware itself is definitely the highest-end hardware that TiVo has ever offered," said Ross Rubin, director of industry analysis for The NPD Group. In addition to the large hard drive for recording HD programming, the new DVR's two cable card slots should do much to relieve the set-up hassles that were part of the standard-definition TiVo set-ups, he said.

The price isn't that extreme when compared with other DVRs capable of recording in HD, said Sean Wargo, director of industry analysis for the Consumer Electronics Association. DirecTV's TiVo HD recorder, for example, was originally sold at $999, but has dropped to $600, Wargo said. The Sony DHG-HDD250 DVR initially sold at $1,000.

As for DVR newcomers, TiVo executives don't sound too concerned about reaching them with this high-end gear.

"We expect our first customers to be current TiVo subscribers that have had TiVo for years and want to extend the experience to HD," said Andrew Morrison, senior product manager for the TiVo Series3. He said TiVo had been looking to push into the home theater market and hopes customers who upgrade to a Series3 will use it in the place of the HD DVRs currently available from cable and satellite companies.

Makes sense, said Rubin, because TiVo needs to offer a lot more than the vanilla DVRs consumers can already get from their cable companies.

"You need to apply that polish to make it seem at home in the home theater of a videophile," he said. "If consumers have to go out of their way to purchase from retail, you're going to have to make it worth those consumers' while."

The feature package explains the high price tag. It's the first THX-certified DVR, bringing to the home theater the same high-quality sound viewers would get at the multiplex. THX, which essentially means the movie's sound is guaranteed to come off the way a director intended, was first used in the 1980s. THX has "a high premium perception in the market," and TiVo worked together with THX to make sure the sound and picture quality can be delivered according to THX's standards, Morrison said.

Two cable card slots enable the TiVo to record two programs in HD at the same time while the user is watching a third pre-recorded show. The Series2 can record just two basic cable channels or one basic cable and one digital cable channel at once. The previous incarnation also could not record over-the-air stations. The Series3 is TiVo's first DVR that can record network programming from ABC, NBC, CBS, Fox, PBS and others from an HD antenna. There is room for 32 hours of HD recording and 300 hours of standard-definition recording.

"Most, if not all, current DVR owners will make the shift to the HD (DVR) version within the next five years," Wargo said. "There's a high correlation between DVR ownership and HD (TV) ownership. I can see a lot of them upgrading."

CEA predicts that this year 4.8 million DVRs will be shipped to dealers--that number does not include the recorders available directly from cable providers like Cablevision and Comcast--and 1.7 million are HD-capable. In 2007, the industry group predicts those numbers will rise to 6.4 million DVRs shipped, with 2.8 million of them supporting HD.

Of course, when compared with the number of TVs out there, that's a less-than-startling 13 percent market penetration. Clearly, there's a lot of room left for growth.

"The experience of using a DVR is much more intuitive than a VCR was, leaving the blinking 12 (o'clock time display) aside," said Wargo. "(A DVR has) more broad appeal as a recording device. Will everyone own a DVR? I don't know. Is there room left to grow? Yes."

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18 comments

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Indeed
The story comments "TiVo needs to offer a lot more than the vanilla DVRs consumers can already get from their cable companies." Indeed they do. If they want to charge a monthly fee, they need to do more than "a lot more". Consumers are going to ask, "why pay a monthly fee to record programs when I can do it for free on a VCR?" I suspect cable companies will follow suit with upgrading their DVR's to HDTV, and at $999 a pop, this box better cook dinner as well.
Posted by Seaspray0 (9714 comments )
Reply Link Flag
Already HD
Cable DVRs were capable of recording in HD
Posted by kingofgods (16 comments )
Link Flag
You can't hack your cable box
The advantage of owning your own DVR is that you can hack it. Want more HD space, cool. Would you like to move files to your local network, not a prob.

Perhaps your are far braver than I am, but I don't think I will be taking apart my Cox cable or my Dish network boxes.
Posted by ralfthedog (1589 comments )
Reply Link Flag
Cox Cable
Regarding Cox cable, they actually do allow you to expand your storage on their DVRs. At least the one I have you can. Its an HD DVR and I can hook up an external USB 2.0 hard drive to it of whatever size I want. (Only one though.) The user interface/features are not the best, but it's easy to use. First half of next year though, Cox will allow me to upgrade the cable box/DVR to turn it into a Tivo via a software download. I can't wait! Intregration with Cox's program guide plus HD, plus Tivo = happy camper!
Posted by einstein1966 (16 comments )
Link Flag
Give me a break!
This still dosen't tell me why the HIGH Price? THX... SO! I didn't notice any TXH connections on the back view. What are the expensive parts that make up the high price? Cable Card is not expensive.

I think TIVO is wrong about this series3.
Posted by QuietStormX (48 comments )
Reply Link Flag
I don't need it
because I don't have HD, nor do I care about it until all channels are in HD.
Posted by paulsecic (298 comments )
Link Flag
THX is not a connection type.
THX is not a connection type, it is an audio quality standard created by George Lucas. HD is expensive in general. If this TiVo has THX home certification it has the best audio and video output available in the home market. Far better output than what you get through your cable box (Remember you only get as good of a picture as your cable company sends you). This is not for everyone, only those who are willing to pay for the best. Over time the price will go down.
Posted by ralfthedog (1589 comments )
Link Flag
Re: Give me a break!
I won't buy one simply because they don't offer a unit that
doesn't include them sapping dollars from you on a monthly
basis.

I'm getting tired of my RCA DRS7000N, but Tivo is definately not
included in any of the units I'll look at.

Charles R. Whealton
Charles Whealton @ pleasedontspam.com
Posted by chuck_whealton (521 comments )
Link Flag
VoD
One big problem i see is that the Cable Card system won't allow
Video On Demand. Although VoD isn't HD its still nice
sometimes to be able to watch shows and movies on the
premium channels on VoD without having to record them first.
So while Tivo may offer some enhancements of the cable boxes
they will also not offer certain features.

As for THX certification, I'm sure it may offer some quality
enhancements, but its a pretty vague label. There isn't really a
strict definition for THX certification of that kind of equipment
and it seems as though THX in terms of home stuff is more of a
label that can be licensed to put on any fairly decent piece of
equipment. I'd also say that there is a ton of super high end,
awesome home theater gear out there that isn't THX certified, so
that also brings into question that relevance of THX certification.

I love Tivo and the way it works and i hate the way my cable box
works, but that difference still isn't worth 800 in my eyes. I'd be
willing to pay a bit of an additional monthly fee or possibly a few
hundred dollars for a box, but not a monthly fee plus several
hundred for the box, especially without the VoD.
Posted by hoss117 (1 comment )
Reply Link Flag
It is not for everyone
Heh, I never expected to be quoted as the lead-in to the article. :-)

As I said in my review, the Series3 is expensive. It is not for everyone, that is clear. And it isn't *meant* for everyone. This isn't TiVo's only product. The Series2 and Series2DT are still available, and the S2DT will be available for some time. After rebates, they're going for less than $100, and with some deals they're basically free.

TiVo also has deals with Comcast and Cox to bring the TiVo software to Motorola DVRs. Comcast expects to have the software in field trials this year, with widespread availability early next. Cox plans to have the software available in early 2007.

And, honestly, the price of the S3 will come down. $800 is the launch price, and it includes the early adopter tax that suckers like myself will pay to have the new toy faster. I readily admit I'll be paying more for the S3 than someone who waits a few months. But we all have to treat ourselves in some way, my weakness is gadgets, especially TiVo. I'm sure you'll be seeing it from online resellers for less than MSRP soon, and then the price will come down - there will probably be rebates, promotions, etc. Remember, the original 14-hour TiVo cost more back in 1999.
Posted by megazone (138 comments )
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