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TiVo moves toward “fourth gateway” for television; RealNetworks, Starz launch broadband movie network

Broadcast, cable and satellite television operators are about to get a new round of competition: on-demand video programming delivered via the Internet.

TiVo, a pioneer in personal video recording, is now working on a new service that will allow its subscribers to download television content directly from the Internet. Although the current TiVo service allows users to watch broadcast, cable or satellite programs at any time, the new technology will make it possible for them to mix content from the Internet with those programs.

RealNetworks and Starz Encore announced a subscription-based movie download service for U.S. broadband Internet users using Windows PCs. Called “STARZ! Ticket on Real Movies,” the service costs $12.95 monthly and offers at least 100 movies at any given time, the companies said last week. It is intended for U.S. residents only and requires a high-speed Internet connection of at least 600kb/s.

In the new world of Internet-connected television, viewers will not have to worry about when a show is scheduled or from where it comes.

In a strategy aimed at establishing its digital video recorder as the entertainment hub of the home, TiVo also announced that home networking features-both wired and wireless — will now be standard with all its devices and that users can now schedule recordings online. A timetable for introducing the new TiVo Internet video service has not been set, nor has its price.

However, the technology has reached viability, and several companies are now moving quickly to differentiate themselves as cable and satellite services migrate toward their own personal recording technologies.

For the Starz movie service, which has already launched, video is encoded in the RealVideo 10 format at 700kb/s. The download time depends on the movie length and the user’s connection speed. The files are between 400MB and 700MB in size and protected using RealNetwork’s Helix Digital Rights Management (DRM) technology to prevent users from sharing them.

The service represents the first time that mainstream films have been available as part of a flat-rate subscription plan over the Internet. A few existing services — such as Movielink and CinemaNow — offer an Internet version of pay-per-view, in which single films can be downloaded for a fee of $1 to $5. But those movies typically can be watched only during a 24-hour period after purchase.

Because most broadband cable and DSL Internet connections do not yet reliably support the data speeds needed to view standard-definition video as it is streamed, most video services using broadband delivery require that programs first be downloaded and stored on a hard drive before viewing. Though this non real-time method is now available for SD programs, it is not yet viable for downloading HDTV content, which requires vastly increased bandwidth.

For standard video quality, the economics may already work, according to a recent Bernstein Research report. It costs just 15 cents an hour to stream standard video across a DSL connection, Wolzien said, and even those costs are falling.

Because the new delivery technology offers a low-cost alternative to today’s media conglomerates, the field is expected to grow rapidly. Both the telephone companies Verizon and SBC are engaged in trials and deployment of fiber-optic networks, which offer significantly higher speeds than existing DSL services.

Video distributors Netflix and Blockbuster are also said to be exploring the possibility of delivering feature-length movies via the Internet to users for delayed viewing.

Michael Gartenberg, research director for the Internet consultant Jupiter Research, suggested that the studios—if they are going to prevent widespread movie piracy — will need to offer consumers the sort of selection and immediate gratification they get on illegal music file-sharing services. And licensing their titles to services such as MovieLink and the Starz Ticket is an important first step, he said.

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