TiVo knows all too well that marketing costs lots of money. Last month the company announced it would lay off 23 percent of its staff to save $60 million and avoid seeking more funding this year.
Until recently, ReplayTV was in even worse shape. The company, based in Mountain View, Calif., priced its unit too high - as much as $1,499 - and lost out in the early running to TiVo. Last November, Replay pulled out of the retail market and announced it would license its technology to other companies. Now ReplayTV is in the process of being acquired by consumer electronics maker SonicBlue. Last month it struck a critical licensing deal with Motorola, which agreed to build ReplayTV into as many as 5 million set-top digital cable boxes. (Motorola controls about two-thirds of the set-top box market, with more than 14 million units sold.)
The potential of this deal lies as much in the marketing as in the distribution. ReplayTV will be pitched to cable customers when they order or change their service. Charter Communications (which, like ReplayTV, is tied to Paul Allen's Vulcan Ventures) has already signed on to be Motorola's first customer.
ReplayTV is not alone in seeing the potential of distribution and marketing through the cable guy. TiVo has links to AOL Time Warner, Comcast and Cox Communications (which hold equity in the company), and Microsoft is looking for cable partners. Meanwhile, EchoStar's Dish Network is offering its own recorder, dubbed the Dishplayer. This month, the company, based in Littleton, Colo., will launch its first national advertising campaign for the device.
With all that marketing muscle behind them, personal video recorders may finally make good on optimists' projections. For viewers of the notoriously anticlimactic Super Bowl, that will bring an added bonus: They can fast-forward through the game to get to the commercials.
