The Palo Alto, California, company, founded in 1997, hopes to iron out potential kinks in a system that delivers program guide information to a TV set-top box via a phone line and then allows users to search that information and create customized lists of programs to record. Testing in several markets nationwide will precede a hoped-for launch in early 1999.
Replay Networks' service employs a special set-top computer that acts like a digital VCR. The device permits users to view ongoing TV programs as well as record programs and replay them at will. Users can even pause and rewind live programs.
The "ReplayTV" set-top represents a new take on gadgets, reflecting the heightened use of digital technologies in the service of the traditionally analog TV. The device employs two large hard disk drives and an MPEG-2 chip for squishing the video signal onto the drive and expanding it again for playback, and dials into a central database that has program guide information.
Despite the technology involved, it is not being positioned as a computer or Internet access device, nor is it even positioned as a VCR replacement. Rather, executives say the device and service exist to make it easier to view TV programs.
To that end, each ReplayTV--which is estimated to cost around $500 when it goes on sale next year--includes a free subscription to the Replay Network Service.
Instead of making money off of subscribers, the company will make money by selling broadcasters and studios space on a special portal-like service that arranges extra programming material (such as in-depth interviews) by theme, explained Michael Kornet, vice president of business development for Replay Networks. Advertisers then have a chance to buy exclusive sponsorship of a program, in addition to regular advertising opportunities, he said.
Replay Networks first burst into the headlines last month when Marc Andreessen, cofounder of Netscape, invested an undisclosed amount of his own money in the firm. Andreessen now has a seat on the company's board of directors.