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TiVo makes HD leap, but at a steep price

Series3 DVR lets you record and display in high def, if you're willing to pay $799 for that quality. TiVo Series3 reviewed

When the TiVo aficionado and blogger MegaZone was offered a review unit of the new high-definition TiVo Series3, he didn't just jump at the chance, he went out and bought a new television to use with it. And not just any TV--he bought a 61-inch, flat-screen HD behemoth.

Clearly, this isn't a guy who would think the $799 price tag for TiVo's new digital video recorder is a turnoff.

"I'm a geek and an early adopter--I paid over $700 for my (Pioneer) DVR-810H, so $800 for the (Series3) isn't out of reach. Heck, I paid $1,700 for my first DVD/CD/(laser disc) system...many years ago because DVD was new," MegaZone wrote in an e-mail interview with CNET

TiVo Series3
Credit: PHOTO TiVo
The new TiVo Series3 high-definition
digital video recorder.

As for the rest of us, TiVo newbies might experience a little sticker shock when pricing the Series3. At $799, that's a significant jump from even the most expensive Series2 TiVo DVR, which tops out at $399. But TiVo has its eye on deep-pocketed consumers and hardcore videophiles who are already dropping serious money for HD televisions.

"Clearly it's not a mass-market price point. However, the hardware itself is definitely the highest-end hardware that TiVo has ever offered," said Ross Rubin, director of industry analysis for The NPD Group. In addition to the large hard drive for recording HD programming, the new DVR's two cable card slots should do much to relieve the set-up hassles that were part of the standard-definition TiVo set-ups, he said.

The price isn't that extreme when compared with other DVRs capable of recording in HD, said Sean Wargo, director of industry analysis for the Consumer Electronics Association. DirecTV's TiVo HD recorder, for example, was originally sold at $999, but has dropped to $600, Wargo said. The Sony DHG-HDD250 DVR initially sold at $1,000.

As for DVR newcomers, TiVo executives don't sound too concerned about reaching them with this high-end gear.

"We expect our first customers to be current TiVo subscribers that have had TiVo for years and want to extend the experience to HD," said Andrew Morrison, senior product manager for the TiVo Series3. He said TiVo had been looking to push into the home theater market and hopes customers who upgrade to a Series3 will use it in the place of the HD DVRs currently available from cable and satellite companies.

Makes sense, said Rubin, because TiVo needs to offer a lot more than the vanilla DVRs consumers can already get from their cable companies.

"You need to apply that polish to make it seem at home in the home theater of a videophile," he said. "If consumers have to go out of their way to purchase from retail, you're going to have to make it worth those consumers' while."

The feature package explains the high price tag. It's the first THX-certified DVR, bringing to the home theater the same high-quality sound viewers would get at the multiplex. THX, which essentially means the movie's sound is guaranteed to come off the way a director intended, was first used in the 1980s. THX has "a high premium perception in the market," and TiVo worked together with THX to make sure the sound and picture quality can be delivered according to THX's standards, Morrison said.

Two cable card slots enable the TiVo to record two programs in HD at the same time while the user is watching a third pre-recorded show. The Series2 can record just two basic cable channels or one basic cable and one digital cable channel at once. The previous incarnation also could not record over-the-air stations. The Series3 is TiVo's first DVR that can record network programming from ABC, NBC, CBS, Fox, PBS and others from an HD antenna. There is room for 32 hours of HD recording and 300 hours of standard-definition recording.

"Most, if not all, current DVR owners will make the shift to the HD (DVR) version within the next five years," Wargo said. "There's a high correlation between DVR ownership and HD (TV) ownership. I can see a lot of them upgrading."

CEA predicts that this year 4.8 million DVRs will be shipped to dealers--that number does not include the recorders available directly from cable providers like Cablevision and Comcast--and 1.7 million are HD-capable. In 2007, the industry group predicts those numbers will rise to 6.4 million DVRs shipped, with 2.8 million of them supporting HD.

Of course, when compared with the number of TVs out there, that's a less-than-startling 13 percent market penetration. Clearly, there's a lot of room left for growth.

"The experience of using a DVR is much more intuitive than a VCR was, leaving the blinking 12 (o'clock time display) aside," said Wargo. "(A DVR has) more broad appeal as a recording device. Will everyone own a DVR? I don't know. Is there room left to grow? Yes."