Sony releases cheaper video recorder based on TiVo

The company begins shipping a digital video recorder priced significantly lower than products from competitors.

Sony today began shipping a digital video recorder based on TiVo technology, priced significantly lower than products from competitors.

Sony today announced the availability of its Sony Digital Network Recorder, which uses TiVo's "Personal TV" service. Announced in January, the device is priced at $399, with monthly subscription fees of $9.95.

"We're excited about the debut of our first Digital Network Recorder with TiVo service because we see it evolving as a gateway product in the development of the broadband home network age," Mike Fidler, senior vice president of home video and digital media products for Sony, said in a statement today.

Digital video recorders using services such as TiVo and ReplayTV basically replace a traditional VCR's tape with a hard drive, allowing viewers to record, freeze and pause live television broadcasts. The Sony set-top box records up to 30 hours of programming.

These types of set-top boxes, along with gaming consoles providing Internet access, digital cable set-top boxes, and other television-based Web services, are expected to help drive non-PC Web surfing among typical consumers, analysts say.

Overall, the market for these products is expected to grow from 11 million units shipped in 1999 to 89 million units in 2004. The market will grow from revenues of $2.4 billion last year to $17.8 billion in 2004, according to research from International Data Corp.

Many expect digital video recording will eventually become popular as part of an integrated package rather than a stand-alone device, especially as home networking and broadband Internet connections become more ubiquitous.

For example, several companies are working on prototypes of products that would combine digital video recording and storage of digital music, creating a type of all-in-one audio-video device that would work within a home network. With broadband Internet access, video on demand also will become a compelling feature.

Sony's aggressive pricing, coupled with the company's brand name in consumer electronics, and specifically its presence in the audio-video market, could pose some problems for ReplayTV, which markets a similar device for $599 and is heading into its initial public offering.

ReplayTV, which recently received $84.9 million in funding from investors like Sega, Matsushita, Excite@Home, Scientific-Atlanta, News Corp., Rogers Communications and Universal Music Group, plans to offer 8.5 million shares to the public for $13 to $15 a share in an offering this year.

Although such devices can work without the lucrative service, the programming help, entertainment guides and personalized TV listings provided are a compelling package for many users. Sony is selling a lifetime subscription for $199 up front, in addition to the monthly contract option.