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Sonicblue to change DVR service fees

Starting this summer, the company will remove the service fee for its digital video recorders from the price of the box and start charging for it separately.

Consumer-electronics maker Sonicblue announced Thursday it will start charging a subscription fee for its digital video recording service starting this summer when it releases new recorders.

Sonicblue Vice President Steve Shannon said the company will offer a lifetime subscription first, followed by a monthly subscription later this year. He did not disclose prices, but said they should be in line with the competition's rates. For comparison, rival company TiVo charges $249 for a lifetime subscription. ("Lifetime" refers to the life of the recorder.)

Until the subscriptions become available, the company will continue to build the cost of maintaining the service into the price of the recorders.

DVRs (digital video recorders) are similar to VCRs, but instead of recording shows to a tape they are stored on a hard drive. Sonicblue's DVR service allows subscribers to pause live broadcasts, pick shows to record in the future and jump past commercials that are stored on the hard drive of its DVRs.

Further details on the subscriptions will come when the ReplayTV 4500 recorders are released this summer. The company will also start selling its recorders in retail stores. The subscription fee for the DVR service will not apply to owners of ReplayTV 4000 recorders.

The move to subscriptions comes as Sonicblue tries to capture more market share in the DVR market, which is led by rival TiVo. TiVo started selling its Series2 recorder earlier this month.

Shannon said the company aims to get 30 percent of the market this year and that entering retail stores will help that effort. The company has been selling its recorders mainly through its Web site as well as through online retailer Amazon.com.

The subscription fee will eliminate one of the distinguishing features of the ReplayTV box, which, unlike records from TiVo, did not require subscription fees. However, ReplayTV boxes appeared to be more expensive because the company was adding the cost of the service to the price of the box.

The shift is a response to requests from retailers that were concerned that the TiVo recorders were less expensive than the ReplayTV boxes, Shannon said. The move will also give consumers more options as to how they wanted to pay for the service, either on a month-to-month basis or a with one-time fee, he added.

"Operationally, the built-in fee was easier for us and for the consumer," Shannon said. "But retailers liked the idea of a lower up-front price, so we're just responding to the market...There was some concern that the competition was getting credit for having a service."

A ReplayTV 4000 box that can store up to 80 hours worth of shows sells for $1,000 on Amazon, while recorders that can store up to 60 hours using TiVo's service cost $400 plus $250 for a lifetime subscription. A ReplayTV 4000 box that can store up to 40 hours worth of shows sells for $700.

TiVo increased its monthly service fee earlier this month from $9.95 to $12.95.

Sonicblue has been working to get its recorders into retail stores by the end of the year, Shannon said. TiVo's Series2 boxes are being sold exclusively in Best Buy stores.

Sonicblue will report its first-quarter financial results later today.

ReplayTV, the name Sonicblue's recorders go by, was the name of the company before Sonicblue bought it last year.