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AT&T Broadband to sell TiVo boxes

The digital video recorders will be available to some of the cable company's customers next week. A new, smaller recorder will be offered for $299.

AT&T Broadband and TiVo announced Wednesday that the cable behemoth will begin offering TiVo video recorders to some of its cable subscribers.

TiVo is one of the pioneers in the digital video recorder business. DVRs essentially are VCRs that use a hard drive instead of a tape to record television shows. Software developed by TiVo allows DVR owners to program the devices to record shows.

Beginning Nov. 15, AT&T customers in the New England region, Denver, and some California cities--including Cupertino, Los Altos, Mountain View, San Jose, Santa Clara and Sunnyvale--will be able to buy a new, smaller TiVo recorder with 40 hours of recording time for $299. Subscriptions will be $9.95 per month or $249 for the lifetime of the recorder.

The announcement should boost TiVo's efforts to sell its recorders, which remain by far the largest revenue-generating part of its business. As of July 31, the company had about 229,000 subscribers to its DVR service. AT&T is the largest cable provider in the United States with about 14 million subscribers.

"These are the first three markets that we are going to roll out in with AT&T," said Ed Lichty, TiVo's director of business development. "There are no current commitments to roll out in other markets, but there is an understanding that if this is successful, we will roll out other markets."

Lichty added that the AT&T deal is more than a product launch, it holds strategic significance as well.

"It not only helps with distribution, but it's another presence that can help educate potential customers about DVR," Lichty said.

Lichty said that the two sides are in discussions to incorporate TiVo's technology further into AT&T's service, but there's nothing to announce.

TiVo has also been making moves to improve the licensing of its technology. At the end of October, the company created a new business unit focusing on licensing. In mid-October, TiVo signed a seven-year licensing deal with Sony to incorporate its technology in future consumer electronics devices.

DVR rival Sonicblue has come under fire in recent weeks because of a lawsuit filed by television networks surrounding its ReplayTV 4000 boxes. The networks are contesting new features that make it easier for Replay customers to skip commercials and that allow them to distribute television shows to other ReplayTV 4000 devices.