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PVRs May Ride Shotgun Until Integration Arrives

While mass deployment of thick-client boxes with integrated personal video recording capabilities will likely come later, rather than sooner, a new breed of PVR "sidecars" have emerged — and could potentially ride shotgun next to millions of legacy thin-client boxes.

Though a sidecar PVR would cost more to deploy than an integrated model, some industry observers believe the products will spark a lucrative, interim market until boxes with on-board capabilities start to roll out of the factories.

But operators that deploy set-tops with on-board PVR capabilities run the risk of stranding capital in the field. For example, if a subscriber obtains such a box but doesn't opt for the PVR, the operator will have a more difficult time recouping its costs. An operator could limit that risk by offering the box only to those subscribers who request the PVR component.

Keen Personal Media, a subsidiary of Western Digital Corp., appears to be getting the most attention for the PVR sidecar it developed just for the cable industry.

Although Keen is well known for PVR software, its work on the hardware side is getting noticed. Part of its hardware pedigree comes from parent Western, which is making the hard drive for Microsoft Corp.'s much-anticipated XBox gaming console.

Keen, which is providing PVR software for Scientific-Atlanta Inc.'s forthcoming Explorer 8000, has already trademarked its sidecar, the Keen Sidecar Personal Video Recorder.

That box would be linked to the set-top via existing universal serial bus or serial ports, and house a graphical user interface that leverages the cable operator's brand, said Keen vice president of marketing Greg Kalsow.

The existing version of Keen's sidecar can handle two-way communications with S-A's Explorer 2000. Adding another element of user-friendliness, Keen is also loading its PVR codes onto S-A remote controls.

If MSOs request it, future iterations could be designed to talk to Motorola Broadband Communications Sector boxes, once embedded serial ports are activated, Kalsow said.

Elsewhere, ReplayTV Inc., which is slated to become a subsidiary of SONICblue Inc., is in talks with several MSOs about sidecars, said company vice president of marketing Steve Shannon.

ReplayTV's cable PVR sidecar will closely resemble its existing standalone box, but will use serial connections rather than infrared blasters to sync up with the set-top, he said.

"We're in talks with several operators about sidecar solutions," Shannon said. "You'll see some deployments of sidecar solutions system-wide in the next six months or so."

MSOs such as AT&T Broadband, Time Warner Cable and Comcast Corp. have already conducted PVR tests with ReplayTV's standalone product.

Feedback from those pilots has been positive, Shannon said. "You can't pry the units out of the customer's hands."

Set-top vendor Pioneer Electronics (USA) Inc. hasn't settled on a sidecar strategy for the Voyager 3000 box, said company vice president of sales and marketing Mark Gurvey. Pioneer's upcoming Voyager 4000 will have PVR capabilities.

"We're looking at different technology that might be appropriate, because the volume of the digital set-top business today is not necessarily in these high-end boxes," Gurvey said. About 80 percent of Pioneer's future box orders are expected to be of the entry- to mid-level variety, he noted.

CacheVision Inc. — the product of a joint venture between consumer-electronics manufacturer Thomson Multimedia and hard-drive maker Seagate Technology Inc. — is also working on "complementary" PVR technology for cable boxes, as well as a number of other services, that go beyond the basics. More details to come; the company's still in stealth mode and for now has released only scant details.

ROLE STILL UNSETTLED

Kalsow said two MSOs have signed on to field-test Keen's sidecar, and two others should sign contracts and test the device in customer homes before the end of the year.

Adelphia Communications Corp. is known to be one of the MSOs that is currently lab-testing Keen's sidecar.

Charter Communications Inc., an MSO considered a champion of the thick-client's future, is weighing both PVR options.

"We're looking at everything," said Charter vice president of corporate development Jim Henderson. "But it's better to do it inside the box if we can," he said, because an integrated design can leverage memory inside the box and the hard disk could be leveraged to store music and run a set-top based jukebox application.

At the same time, Charter has already deployed millions of thin boxes, "so you start to look at how to invest in that deployed capital," Henderson said. "Sidecars are a good way to do that."

But integrating the sidecar with the box's legacy electronic-program guide presents another layer of complexity, making it difficult for the two devices to act as one.

"It can be overcome, but it presents some challenges," Henderson said, adding that Keen "has the best sidecar solution in the industry today," primarily because it's already integrated with S-A's "Sara" EPG.

Charter might conduct a PVR sidecar trial later this year, he said.

Time Warner Cable, which has an order in for 100,000 Explorer 8000s, is "looking at all aspects of [PVR] technology and how to make it available to customers," said MSO spokesman Mike Luftman. He wouldn't elaborate on TWC's sidecar plans beyond the fact that the company is exploring a number of PVR methods.

While some MSOs plan to provide both options, others — such as Cablevision Systems Corp. — have said set-top sidecars will likely be the only option, at least in the early going. Cablevision, which will deploy a beefy Sony Corp. set-top sans hard drive for its digital foray, will initially leave that decision up to its customers.

Simply said, if customers want a PVR option, they will pay for the hardware to support it.

ON-BOARD PVRS WILL RISE

While the sidecar would hasten cable's move into the PVR marketplace, many in the cable industry believe that the integrated version of the product will win out in the end.

"Today, there are larger possibilities for the sidecar, but that will shift over time and the integrated [approach] will become the dominant solution," said ReplayTV's Shannon.

Historically, sidecars make for better marketing stories than deployment strategies, said Bob Van Orden, vice president of product strategy for S-A's subscriber networks unit. "We're much bigger believers in the integrated approach," because a two-box arrangement is much more difficult for the consumer to set-up and could add truck roll costs to an operator's books, he added.

"Consumers see [standalone PVRs] as an added hassle," said Sean Badding, vice president of business development at The Carmel Group, noting that PVR sidecars will serve only a small, niche market.

On top of that, a two-box combination is more expensive and cumbersome, and tends to muddle consumer understanding of the benefits inherent in PVR technology.

"It comes down to economics and perceived value," Badding said.

Still, an interim sidecar option could reduce digital churn and entice basic customers to upgrade to digital and opt to rent the sidecar for a few dollars a month.

"That's the glue that might hold together the digital upgrade," Kalsow said.