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DBS Providers Strike PVR Gold

PVRs, personal video recorders, may prove to be the trigger point for mass consumption of interactive TV. Convenient, capable of recording over 30 hours worth of television programming, and even providing users the ability to surf the Internet via high-speed cable modem and DSL, these machines give busy Americans more control than they ever dreamed of over their TV schedules (and subsequently, their lives). DBS providers DIRECTV and EchoStar* have already seized upon this potentially explosive market by bundling PVR functionalities with their satellite receivers. And with both companies promising further technological innovations in this arena, it looks like PVRs will be the next "big thing" to hit the market.

DIRECTV has been on the PVR bandwagon for just about a year, having launched a package bundling its satellite service with TiVo's PVR functionality in December of 2000. Soon after, it began marketing a similar service with Microsoft's UltimateTV product. Both the services offer up to 35 hours of digital video recording, pause, replay, slow motion, and playback of "live TV." In addition, the TiVo service can automatically record shows based on viewer interests, and UltimateTV offers dual tuners and Web-surfing capabilities.

Gina Magee, a spokesperson for DIRECTV,** said her company chose to roll out the PVR services because many of its customers where asking for that kind of functionality. "Consumers were just demanding more," she commented. Unfortunately, customer take on the PVRs has not been as high as the company expected: "I'll be honest and say that I don't think the demand is where we thought it would be," conceded Magee. She went on to say however, that a lot of this was due to the high prices of the products and that recently, manufacturers of the boxes had lowered their prices by up to $150.

EchoStar also has some tricks up its sleeve. It recently launched its second offering in the PVR arena, the DishPVR 501. The 501 is an integrated satellite receiver and PVR which can record up to 35 hours of programming. It offers all the typical PVR functionalities (rewind, slow motion, pause) and has an electronic program guide (EPG) that allows users to view schedule lineups for up to two days ahead of time.

Marc Lumpkin, manager of Communications for EchoStar, says one of the chief advantages of the 501 is that users are not charged an extra monthly fee for its services. This is because the company develops and manufacturers its own hardware and does not contract with PVR companies such as TiVo or UltimateTV. "We don't have to charge our customers ten dollars a month just for the recording features, like TiVo does or DIRECTV has to do with any TiVo or UltimateTV product," he stated. EchoStar's first PVR product, the DISHPlayer, which came out in 1999, was recently discontinued. A new box, which, at the time of this writing was slated to debut at CES 2002, the DishPVR 721, will allow for high-speed Internet access through DSL. In addition, EchoStar has penned a deal with Starband to provide two-way Internet via satellite for the 721.

All in all, it looks like satellite companies and PVR technology are walking hand-in-hand toward a bright future. With future upgrades allowing for hard drive expansion and lower pricing, DBS providers may have discovered a gold mine.n *After the writing of this article, EchoStar announced its intention to purchase Hughes Electronics, the parent company of DIRECTV. At the time of publication, the deal was still pending due to regulatory issues.

**Since the writing of this article Gina Magee has left DIRECTV. Her quotes and other information have been verified by the company.