Coming soon to N.J.: digital VCR rentals

Under separate deals, Comcast cable customers in two areas will be able to lease, instead of buy, products from rivals TiVo and ReplayTV.

Comcast cable customers in two New Jersey areas will soon be able to lease, instead of buy, a digital video recorder.

Under separate deals announced today, Comcast customers in Cherry Hill, N.J., will be able to try out a TiVo digital video recorder, while customers in Burlington County will be offered the same from rival ReplayTV.

In both cases, consumers will be able to get the units at no up-front cost. Instead, a monthly fee will be added to their cable bills. Both machines allow consumers to record their favorite TV programs onto hard disks instead of having to use videotape.

Adding TiVo or ReplayTV service is important for the cable companies because satellite TV operators have already moved to add such features to their offerings.

The ReplayTV service will cost $11.95 per month. TiVo's monthly fee is not final yet but will probably be about $19, according to Edward Lichty, director of business development for TiVo. The cost difference reflects the fact that TiVo typically charges a $9.95 monthly service fee while ReplayTV users pay only for hardware.

Both companies say the New Jersey trials, which start next month, are a chance to try out a new pricing mechanism.

"It's a way to offer TiVo without the customer having to purchase the hardware," Lichty said. Financing the cost of new technology has proven popular in the computer world, with programs such as Gateway's YourWare.

Although the TiVo deal will initially be available only to Comcast's 220,000 subscribers in Cherry Hill, the plan is to expand if sales go well.

"I think we both want it to proceed beyond that," Lichty said. In addition to moving into new markets, TiVo could offer custom services such as video games and music as downloads, Lichty said.

Although TiVo could offer leasing on its own, partnering with Comcast allows the company to tap into Comcast's billing system. The cable company is also going to handle installation and marketing. Comcast will receive a share of the monthly fee, Lichty said.

Comcast has invested in both TiVo and ReplayTV.

In related news, TiVo reported today that it lost $29 million, or 82 cents per share, for the quarter ended June 30, on revenue of $719,000. In the same quarter last year, the company lost $6.1 million, or $1.15 a share, on revenue of $8,000.

TiVo said its subscriber base has grown to 51,000.