• by Paul Gough , May 22, 2003

As one DVR (Digital Video Recording) pioneer is put up for sale by its beleaguered parent company, another is making moves to stay ahead of the marketplace.

SONICblue said it would file for bankruptcy and sell its ReplayTV subsidiary to a Japanese company for $40 million. ReplayTV was one of the first companies to come up with digital video recording technology, and its latest versions offer not only fast-forwarding through commercials but also skipping commercials altogether. And if that wasn't controversial enough, ReplayTV has drawn fire from content providers for its ability to share video via the Internet.

A few days earlier, TiVo outlined its plans to keep its head above water by branching out into premium services and by steadying its revenue stream from advertising. CEO Michael Ramsay said the company's growth plan calls for increasing subscription to more than a million by the end of 2003. In the past year, the subscription base (a combination of $12.95/month and a one-time fee for lifetime service) has grown 64 percent to 624,000, with 115,000 subscriptions sold during the 2002 holiday season alone.

Ramsay said he isn't worried about the commodization of DVRs, which are now being offered as add-on services from cable and satellite providers. He said competitors' efforts in focusing on the recording features wouldn't affect TiVo's plans for expansion. The keys to TiVo's efforts are its focus on customer service and unique feature development. "Consumer products with only hard drives are simply not going to deliver on the potential ... DVR is just the starting point," Ramsay said.