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TW to launch PVR test

Signaling the growing popularity of personal-video-recorder technology in the consumer marketplace, Time Warner Cable plans to begin testing ReplayTV's PVR system in its Los Angeles operation next month.

The MSO will give selected Southern California customers ReplayTV PVRs and the free ReplayTV electronic-program-guide service as part of their cable package. For the six-month trial, ReplayTV will create a special "Time Warner Cable ReplayZone" to highlight Time Warner's pay-per-view offerings, categorizing movies by genre and listing them for a seven-day period.

Time Warner is conducting the ReplayTV trial to gather more information about PVR usage before it adds disk recorders to its digital set-tops, says Senior Vice President of New-Product Development Kevin Leddy.

"This is the customer research," he says. "We've all seen the technology, and we think it's a fascinating technology. We're convinced customers really appreciate it, and we're going ahead with plans to include hard drives in set-tops."

Leddy concedes that PVR systems like ReplayTV and TiVo pose a threat to a cable operator's electronic program guides, which have long been billed as a launching point for advertising, interactive services and e-commerce opportunities. He believes that issue will go away when Time Warner takes charge of the PVR by integrating it into the set-top. And he thinks the PVR will improve Time Warner's premium programming business.

"It should also help pay-per-view," says Leddy. "Even in NVOD form, the PVR makes it that much more convenient: You can buy a movie and keep it stored on the hard drive." Through the set-top, he adds, Time Warner will know how many times a viewer used a PPV movie and "can charge accordingly."

The effect PVRs may have on video-on-demand is "more complicated" to gauge, he says, noting that customers might see less need to buy a VOD movie because they're getting more value out of their premium and basic services.