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appeal into PVRs
Boxes offering more for less, supported by ads
By David Everitt
For all the excited chatter about personal video recorders–remember the "create your own network" line?–PVRs have so far failed to become the next sensation to sweep the nation.
The problem may simply be that consumers don’t think they’re getting enough for their money.
First, you have to buy the equipment, usually within the $500 to $700 range. Then you have to pay a monthly service fee.
If you’ve already got a VCR to record your favorite programs, this kind of extra expenditure isn’t likely to make a lot of sense.
A recent study bears this out. According to a survey conducted by TechTrends, only 6 percent of TV viewers are willing to pay a $9-a-month PVR service fee.
A company called CacheVision has proposed a solution to this problem.
What it plans to do is offer a box that does more than video recording alone, and it hopes to offer the service for less than current PVR prices.
Advertising is a key element in bringing the prices down.
"Over two years ago we realized there was a large opportunity to do something new in this area," says Stevan Eidson, CacheVision’s vice president of marketing.
"That’s when we came up with the idea of the PVR as a storage device, and we think there are a great number of opportunities for that."
By using the term "storage device," Eidson is referring to the idea that a PVR can store data for a range of services that could include T-commerce, a selection of digital music channels, and a new variation on video-on-demand.
As for storing these services in a device that’s more affordable, Eidson says, "Our goal over the next 12 months is to bring the price of the box down to the $199 to $299 range."
The $199 price tag would be significant. That’s the price level that made DVD players a popular commodity.
Eidson claims that the company has been able to keep its prices down through "a combination of software expertise and system-design expertise."
CacheVision will not be manufacturing the devices for the retail market. Instead its technology will be available in devices made by other manufacturers.
Among the possibilities are Sony, Phillips and CacheVision investor Thomson. The boxes would be offered by cable operators to their customers and are supposed to be deployed either late this year or early next year.
Although the CacheVision boxes can offer a range of services beyond video recording, not all the services will be available at first. Consumer demand will determine when a service will be introduced.
"At first," says Eidson, "premium content will probably be at the top of the list, specifically movies on demand."
But this won’t be full, instantaneous video-on-demand. More like a virtual, delayed-gratification version. Consumers will select a movie, and the box will download it overnight so that it can be viewed the next day.
The idea here is to avoid the electronic traffic jams that can occur when many movies are ordered for instant viewing at the same time.
Revenues from a premium video-on-demand service could help make it possible for cable operators to offer the basic PVR service without a monthly fee. Advertising stored on the device’s hard disk would be the other source of revenue to allow free PVR service.
The way it’s supposed to work is that consumers will record a show, and then ads from the device’s hard-disk inventory will be inserted at the beginning and end of the show.
A plausible theory, but the advertising scheme actually constitutes a hitch in the CacheVision plan, at least for the time being.
Although the technology can handle this function, the ad economy might not be quite ready to take this new leap.
"For cable operators, this is not something that they’re interested in today," says Eidson. "It’ll take more time to build consumer acceptance."
November 14, 2001 © 2001 Media Life
-David Everitt covers technology for Media Life, writing from Huntington, New York.
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