When Verizon Communications introduced a new multiroom digital video recorder service as part of its FiOS TV service on Aug. 14, the phone company-turned-video provider touted the development as a ray of hope for the huddled viewing masses whose DVRs are shackled to a single television set.
The service “breaks through technology barriers and living room walls to let customers enjoy TV on their own terms throughout the home,” said Marilyn O’Connell, Verizon’s senior vice president of video solutions.
Using a coaxial-cable backbone, the Verizon Home Media DVR slings recorded digital video streams to as many as three TV sets at once. That means programs stored on a Motorola DVR-inclusive set-top box in the living room can find their way to TV sets in the bedroom and the basement, without the need for separate (and expensive) DVRs attached to those extra TV sets.
But is extending DVR features to, say, two additional TVs worth two times the price?
Verizon offers the service at $19.95 a month — $7 more than its single-DVR fee — and adds on $3.95 per month for each extra set-top device. A customer with two TV sets tied to the Home Media DVR service, for instance, would pay $27.85 a month for the capability.
“Will anybody go for it? I think a lot of people will think that pricing is too high — but some won’t,” said Gary Sasaki, president of Digi dia, a consulting and research firm in Cupertino, Calif.
RACE WITHOUT END
Either way, Verizon’s head start in this race may not amount to much, in Sasaki’s view. That’s because by the time the idea of multiroom DVRs really catches fire, other cable and satellite providers will be marketing their own versions. For Verizon, “it’s a pseudo-differentiator,” he said. “There are a lot of ways to skin this cat.”
Another issue: Verizon had to fix some technical glitches this summer before it officially launched the multiroom DVR service. The problem was with the media-management portion of the FiOS Home Media DVR service that streams music from a personal computer to a customer’s stereo system, said Verizon director of interactive-TV services Joe Ambeault.
“The audio quality being delivered from the PC was not up to our expectations,” he said, adding that the video features of the service “went off without a single hitch.” The service’s media-management software has been updated to correct the audio issues as of last week, Ambeault said.
In addition to Motorola’s set-top box, Verizon uses Microsoft’s ITV-software platform, which includes DVR features. Verizon recently assumed greater responsibility for developing the set-top software internally, after it became “frustrated with delays and technical glitches with Microsoft’s technology,” according to a report in The Wall Street Journal. (Microsoft said Verizon has always had a stated strategy for extensive in-house development of its set-top software.)
At a higher level, no one knows for sure whether the availability of a multiroom DVR service will sway customers to one platform or another. But proponents of the concept say that liberating recorded digital video streams from the confines of a single DVR attached to just one television set is potentially a game-changing application, although it’s one that has seen only tepid distributor support to date.
“The consumer appeal is very emotive,” said Michael Collette, president of Narad Networks, a provider of switched broadband-access devices for cable operators. Collette was previously the president of one of the first multiroom DVR software platform developers, Ucentric Systems, which was acquired by Motorola in January 2005.
A robust multiroom DVR service, Collette said, “has enough emotive value that, if marketed properly, you could actually switch out satellite and cable customers.”
Consumer research has found some interest in the idea of having access to stored digital-video content throughout the home, or at least on an extra TV set or two.
Parks Associates, a consumer-electronics research firm in Dallas, thinks there’s enough oomph in the category that 16 million U.S. homes will be outfitted with networked, multiroom DVR systems by 2009, up from a negligible number today. Meanwhile, the average U.S. home now has more television sets (2.73 per household) than people (2.55), according to Nielsen Media Research.
“DVR’s a functionality that consumers are growing to expect,” said Dave Clark, director of product strategy and management for Scientific Atlanta, which provides the multiroom DVR platform used by Time Warner Cable. “But multiroom DVR going forward is going to become a natural subset of that.”
WAITING FOR LIFTOFF
One big question is when multiroom DVRs will take flight. Clark and others admit the going has been slow for the technology, at least among mainstream cable companies. Of the estimated 12 million U.S. households with a DVR, only a fraction have more than one such set-top, and the number of homes with some form of networked DVR system is even smaller.
Several cable companies have introduced multiroom DVR packages into various U.S. markets, with Time Warner Cable being the most prominent. But equipment providers say cable providers in general have shied away from aggressive promotions of the technology.
“I would say quite candidly that the market enthusiasm has been quite light,” said Clark.
That could change as cable operators, many now deeply engaged in voice-over-Internet-protocol deployments, take another look. Cox Communications earlier this year began a trial of the Scientific Atlanta multiroom DVR. Comcast has ordered close to 500,000 next-generation set-top boxes from Panasonic Consumer Electronics and Samsung Electronics America that will include chipsets and software certified for specifications from the Multimedia over Coax Alliance (MoCA), an inside-the-home, coaxial cable-based networking initiative that supported multiroom DVRs.
Motorola, sensing a rising interest among cable and telephone companies, has devised ways to retrofit its legacy base of DCT-model set-tops with a network interface module enabling a multiroom DVR experience. The gear maker has also begun to integrate middleware into all of its new DVR set-tops to enable a more elaborate multiroom DVR application. The work was inspired partly by a realization that “most of the major MSOs have defined plans to offer a multiroom experience,” said John Burke, corporate vice president and general manager of Motorola’s consumer entertainment solutions group.
CHARTER’S GOT MOXI
Charter Communications uses Digeo’s Moxi Media Center set-top box to provide DVR features and will offer subscribers the vendor’s Moxi Mate terminal, a $79 device that delivers DVR features to a second TV.
Cable’s rivals also are swinging into the multiroom DVR dance. Top executives from direct-broadcast satellite provider DirecTV have talked openly for the last year about developing a “whole home” DVR product line that makes it easy and inexpensive for customers to add DVR functionality to multiple TV sets using smallish add-on devices.
DirecTV in January 2005 announced it would use software from Ucentric to power the effort, although little has been said publicly since then. EchoStar Communications Corp.’s Dish Network already offers a feature that lets users of certain set-tops zing DVR-stored content to another TV set linked via coaxial cable. Leichtman Research Group, a telecommunications industry research firm, said Dish Network likely has more multi-DVR customers than any other video distributor. What percentage of those boxes is networked between multiple rooms isn’t known.
Forrester Research principal analyst Josh Bernoff predicts that by 2008, today’s single-set DVR subscribers will naturally migrate to multiroom DVR services. With Verizon and AT&T making the capability a standard part of their IP-based TV offerings, and satellite companies pushing the feature as well, cable providers will be compelled to keep up, he said.
As DVRs stretch their tentacles into every corner of the house, recorded viewing will also increase, Bernoff said. The percentage of recorded viewing in DVR homes is less than 10%, according to Nielsen Media Research. But “the reason recorded viewing looks so low is that DVR features are typically available only on the main TV in the house,” Bernoff wrote in a recent research report.
In Bernoff’s view, the two main effects of multiroom DVR will be more ad-skipping by viewers and an increase in Internet-based video available through digital video recorders. “This video won’t compete with popular high-definition broadcast programs,” Bernoff said, “but it will help to satisfy customers with cravings for behind-the-scenes outtakes” and other niche content.
Some technology vendors see multiroom DVRs as just one step along the path toward a future in which video finds its way onto virtually any device inside or outside the home.
Motorola, which supplies the MoCA-compliant set-top platform being used for Verizon’s Home Media Center offering, believes making stored video content available from a master DVR to multiple TV sets is just a small part of a bigger revolution in digital media and home networks — a revolution whose ultimate pursuit is the idea of getting any video or multimedia content to any customer device, including portable video players and cell phones.
That’s a bolder vision, but it’s more complicated and it will take more time to achieve significant presence, said Burke.
“Multiroom DVR is just one example of a seamless mobility experience,” he said.
Others say two more ingredients are needed to encourage broader adoption of whole-home or multiroom DVR technologies. One is making it easy to use digital recordings from anywhere within the home. TiVo Inc., a DVR category pioneer, has offered for several years a “Home Media Option” that lashes two TiVo Series 2 DVRs together over a hard-wired Ethernet connection or wireless home network. The networked solution lets users watch the contents of either DVR from the other using a common on-screen interface, and supports limited sharing of digital photos and music files across different rooms of the house. But the TiVo Home Media Option falls short of a true whole-home offering, critics have said.
“People don’t quite get the difference between a rudimentary capability to record video in the living room and play it in the bedroom … and a whole-home system that provides real unified services throughout the home with a single [user interface] that works the same wherever you go,” said former Ucentric executive Collette. A TiVo spokesperson declined to comment on whether the new TiVo Series 3 DVRs would include a multiroom playback capability.
Price is another potential impediment. Leichtman Research Group president Bruce Leicht man said Verizon is stretching too high with the cost of its Home Media DVR service. “It’s not competitive,” he said.
But the Verizon multiroom DVR is innovative, said Park Associates vice president and principal analyst Kurt Scherf. “Just as TiVo and its ilk introduced 'time-shifting’ to the consumption of television content, multiroom DVR solutions will offer 'place-shifting’ capabilities,” wrote Scherf in an analysis of the Verizon announcement.
Digidia’s Sasaki said some families with DVRs have started to fight over the programming schedule, and that could spur interest in multiroom capabilities. “Maybe your kid has already filled up the DVR’s hard drive with junk, so you think, 'OK, we’ll just get another one.’ ”
Leichtman, despite his quibbles about Verizon’s multiroom DVR price, thinks the idea has obvious appeal. “It’s just like HDTV,” Leichtman said. “Once you get it in your household, you want it on all your sets.”
That, more than anything else, may be what finally gets the multiroom DVR category some traction. Said Scientific Atlanta’s Clark: “We’ve gone into some homes that have multiroom DVR, and we’ve had a very hard time getting people to give it up.”
Todd Spangler contributed to this report.
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