The Truth About DVRs

Wondering why you can't buy a digital video recorder without also signing up for TiVo or a specific cable service?

by Stephen H. Wildstrom

Harry Leslie asks: A couple of months ago, I tried to find a [replacement] DVR to purchase but could not find any that were not part of a TiVo package. The clerks at two stores told me that I would have to subscribe to TiVo (TIVO) to use the machines. I can't believe there isn't any demand for DVRs and am wondering why they apparently aren't available. A conspiracy theorist would say that TiVo, Comcast (CMCSA), and others are keeping them off the market to boost their services. Do you know why DVRs don't seem to be available to consumers except through TiVo or other subscription services, such as Comcast's? Or, better yet, do you know where they can be purchased?

It's a sad story. Effective July 1, 2007, the Federal Communications Commission required cable companies to separate the security functions of their set-top boxes from other roles, such as tuning, recording, etc. This change was supposed to free consumers from the tyranny of having to accept whatever set-top box the cable company chose to offer. Instead they would be able to buy a box at retail and connect it to a cable network by getting a device called a CableCARD from the cable operator.

However, pretty much nothing has gone the way it was supposed to in the eight months since the FCC edict took effect. The cable companies offer CableCARDs, but they don't make them particularly easy to get. Even if you can get one, the technology is fraught with problems. It took two Comcast engineers two trips to my house to get a TiVo HD system working. And even when it works, you can't get on-demand or pay-per-view programming. Naturally, if you pay for the cable company's box instead, those services work just fine.

Meanwhile, consumer-electronics makers have fled the independent set-top box business thanks to foot-dragging by cable operators and the sluggish process of getting their products certified by CableLabs, the industry's research-and-standards arm. CableLabs and the operators have also scared consumer-electronics companies out of making third-party set-top boxes by insisting that CableCARDs will soon be superseded by a software-only solution called the Open Cable Platform.

As a result, I know of only two third-party CableCARD devices that are really aimed at the mass market: the aforementioned TiVo HD and a cable tuner made by ATI that plugs into computers running on Windows Media Center. The TiVo, priced at $299, has enjoyed considerable success, though it does require a TiVo subscription in addition to monthly cable charges. The ATI TV Wonder hasn't done as well. It is available for purchase only as part of a new computer system and adds significantly to the cost. Microsoft (MSFT) has reportedly become very frustrated with the whole CableCARD effort and may give up on it.

When cable carriers started offering boxes with DVRs built in, they pretty much drove third-party boxes off the shelves. The CableCARD mandate was supposed to revive the market, but without serious enforcement efforts by the FCC, I doubt that will ever happen.

Wildstrom is Technology & You columnist for BusinessWeek. You can contact him at techandyou@businessweek.com .