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A three-judge federal appeals court ruled on Thursday that EchoStar/Dish Network violated Tivo’s DVR software patent. Tivo is expected to receive about $94 million in damages and interest. As a result, Tivo’s stock soared 29% on Thursday. Naturally, EchoStar said it would appeal the ruling, which will extend litigation that has been ongoing since 2004.

Dish said in a statement:

We are pleased the Federal Circuit found for us on Tivo’s hardware claims, but are disappointed in the Federal Circuit’s decision on the software claims. The decision, however, will have no effect on our current or future customers because EchoStar’s engineers have developed and deployed ‘next-generation’ DVR software to our customers’ DVRs. This improved software is fully operational, has been automatically downloaded to current customers, and does not infringe the Tivo patent at issue in the Federal Circuit’s ruling.

So Dish customers will be able to use their existing DVRs without being affected much by this ruling.

For its part Tivo’s press release was full of joy:

“We are extremely pleased that the United States Court of Appeals for the Federal Circuit unanimously ruled in our favor in EchoStar’s appeal of the district court judgment of patent infringement, full award of damages and that the injunction, which was stayed pending appeal, was ordered to be  reinstated. Today’s ruling is confirmation of the value of TiVo’s IP portfolio, which is in addition to the other benefits TiVo has to offer. TiVo can now continue to focus on its goal to drive greater distribution in both its stand alone and mass distribution efforts.”

So essentially Tivo won on software, but not on its hardware claims. That’s ok, I guess, since Tivo is discontinuing its Series 3 HD DVRs according to Megazone at Tivo Lovers.

[tags] DVR, Tivo, Dish Network, EchoStar, lawsuit, Series 3 [/tags]

Tom Keating over at TMCnet writes that his DirecTV DVR has a new firmware that has introduced a bug in his fast forward feature. He says that after the update, his DVR does not stop accurately when he is fast forwarding through commercials. In fact, he said it even puts him back to a point before he started the fast forwarding.

I don’t use or know much about the DirecTV DVR (with the DVD receiver), but the fast forwarding appears to work much like Tivo’s. If you’re fast forwarding, and stop after the commercials are over, Tivo backs up a few seconds so that you reach the correct stop point. It looks like the DirecTV DVR is taking this fast forwarding correction to the extreme and going back too far.

In order to avoid this problem, Keating said he has to slow down and use the slower 2x or 3x fast-forward now since the 4x doesn’t work correctly anymore.

DirecTV “espouses” this feature on their website when they write, “Fast-forwarded too far? Fast Forward Correction takes you to where you really wanted to stop”. Yeah, right. Can I sue for false advertising? Losing the ability to FFW is really starting to tick me off.

Although Keating admits that he can use the 30 second skip button, an over-sensitive correction feature can definitely frustrate veteran DirecTV DVR users. I wonder if DirecTV will fix this or if users will have to have a work around.

Are you a DirecTV user and are experiencing this problem? Write a comment so we can track this and see if there’s a fix available.

[tags] DirecTV, DVR, fast forwarding, digital video recover, DirecTV DVR, Tivo [/tags]

Nick Wingfield from the Wall Street Journal writes about how no one’s really figured how  to watch Internet video on TV sets.  So far, products like Apple TV and Akimbo haven’t reached mass usage for a number of reasons such as they’re hard to use, hard to install, high cost and low value proposition because content can be found elsewhere.

Wingfield goes through the problems and talked to vendors to discuss possible solutions. For example, the problem of too many set-top boxes. Consumers need to know that a new stand-alone box gives them something they can’t get anywhere else. Things like new high def DVD players have the potential to keep a coveted place underneath the TV set. Also, game systems like PlayStation 3 and Xbox 360 act as set-tops since they can download music and movies.

The solution to this is incorporating features into existing devices or one new converged box. However, there’s no consensus on what that box might be. Will it be Tivo? A cable box with a DVR and Internet functions?

According to Scientific Atlanta, cable companies may end up winning this battle. Cable and satellite TV providers already provide the majority of DVR devices to U.S. consumers, so it seems possible that Internet connectivity will soon be a part of set-tops. Kip Compton, general manager at Scientific Atlanta said that cable companies will begin rolling cable boxes that can access Internet video next year.

However, others believe that cable companies won’t want to do this because consumers will be able to watch TV free by accessing content on the Internet. And that may impact their revenue.

Cable and satellite companies, however, need to think beyond their quarterly earnings cycle and think longer term. Consumers will be happier and increased usage in Internet video may mean better integration of digital media advertising and may spur other revenue that we haven’t even thought of.

IPTV services may have the biggest jump. In the U.S. AT&T’s U-Verse and Verizon’s FiOS TV services use IP networks to deliver broadcast TV programming. So integrating other IP features should be relatively easier than it would be for cable or satellite providers.

So far, however, IPTV providers are just ramping up in the U.S. so they’re just trying to roll out broadcast and VOD services and gain new customers. Advanced Internet features aren’t yet a big part of IPTV, either in the U.S. or the rest of the world where IPTV is much more mature.

An analysis by the Television Bureau of Advertising found that cable penetration fell to 61.3% of all TV households compared to 62.1% last year. That’s the lowest that cable penetration has been since February 1990.

It’s not a big drop, but it’s a sign that other broadcast TV providers are gaining. There’s no information on how the Internet other VOD systems are affecting cable penetration rates, but it’s likely there’s some cause-effect here.

Meanwhile, satellite and other TV providers are gaining on cable.  So called “alternative delivery systems” went from 24.5% last year to 28% this year.  Broadcast satellite is the leader in this category with an estimated 27.6% of TV households, up from 24 percent a year ago.

The study didn’t look at IPTV specifically, but it should be among the alternative systems since it’s usually delivered via fiber or DSL. But in the U.S. IPTV deployments have been rather small still, unlike Europe or Asia where IPTV is growing at a very fast rate.

AT&T and Verizon are now battling cable and satellite providers with their IPTV offerings in many states and communities, but so far their subscriber numbers are pretty low. AT&T’s U-Verse offering has about 126,000 subscribers, while Verizon’s FiOS TV has about 515,000 as of the end of the second quarter 2007.

[tags] cable penetration, cable TV, cable, satellite, IPTV  [/tags]

Bonus: Press release from the TV Bureau of Advertising.

In filings with the SEC, EchoStar said it was changing its name to DISH Network Corporation. It’s also expected to spin off its set-top box business as well as its Sling Media division to a new company called EchoStar Holding Company.

This makes things a bit easier to keep track of, since most people know the brand (Dish Network) rather than the company behind it (EchoStar).

Meanwhile, AT&T is supposedly still looking to acquire the DISH Network Corporation but no announcements have been made yet. This is one rumor that everyone expects, but that hasn’t happened yet.

A story from E-Commerce Times says that DVR use is growing due to cable and satellite TV providers that are “pushing much of the growth with their offers of discounted and subsidized boxes and services.”

Additionally, Leichtman Research Group predicts that by 2011, DVRs will be in 60 million homes, or 50% of U.S. households.

LRG President Bruce Leichtman said that the DVR market isn’t driven by consumer demand. “It’s often about supply. This is a great example about the supply side pushing a product.”

Another analyst said that DVRs have moved from being a premium offering to a standard one.

Cable and satellite providers are essentially subsidizing them into the market, as has the growth o HDTV. DVR use increases because consumer usually upgrade their service to HD, then decide to get a DVR because it’s usually part of the set-top box anyway. Some providers just charge an extra $5 per month to get a DVR with the set-top.

LRG found that even though DVR ownership is increasing, only 45% of DVR owners record five or fewer programs a week. LRG says that 95 percent of all TV viewing in the U.S. is still live TV.

“We should not assume,” [Leichtman] continued, “that just because DVRs are in one out of every five homes that they’re dramatically changing the landscape of television overall even in the homes that have a DVR.”

[tags] Tivo, Comcast, DirecTV, EchoStar, cable, DVR [/tags]

On Monday, EchoStar announced it was acquiring place-shifting company Sling Media for $380 million. Although many people expected Sling Media to be acquired, it seems many were shocked that it happened so soon.

Sling was one a pioneer place-shifting company, makers of the Slingbox. The device connects to the TV/cable box/DVR and lets users watch their TV shows anywhere there’s a broadband connection. A new feature, called Clip and Sling, allows users to create clips of their favorite TV shows and share them with friends.
The relationship between EchoStar and Sling go back a few years since EchoStar was an early investor. And teaming with Echostar means that Sling now has  deeper pockets. Says GigaOm:

Sling has established a nice brand, but in order to grow further the company needs deep pockets of a corporate master.

Meanwhile, EchoStar just asked the Internal Revenue Service if it can separate its technology and infrastructure assets by forming a spin off. The Sling acquisition will fall into the spinout.

You may also recall that EchoStar is in the middle of a lawsuit with Tivo. Tivo filed a lawsuit against EchoStar in 2004 saying that the operator of the satellite-based DISH Network, was infringing on its DVR patent.

Overall, I’d bet that Tivo is miffed now that EchoStar owns Sling. A combination of Tivo and Sling would have been a killer combination since many customers already own both a Tivo DVR and a Slingbox.

So some questions:

• Will EchoStar continue to allow Sling’s place-shifting from non-EchoStar devices?
• Will innovation be stifled at Sling now that it’s owned by a major provider?
• Will Sling move to a more ad-based model?

A short post on Consumerist tells a story of someone that bought a used DirecTivo HR 10-250 box from eBay and now DirecTV claims that it is an unreturned box and wants $600 for it. Although the story on Consumerist was confusing, many commenters believed that the box was stolen.

It seems that the original post from a blogger called Tobin clears up some of the mystery. After DirecTV shut down Tobin’s service, he managed to convey his story clearly and got the charge reversed. Even though DirecTV hasn’t sold the HR 10-250 for over a year, they assumed that the DVR was bought from DirecTV and charged him for it.
Lesson here? I don’t know if there is one. Except to be persistent, tell your story and you may prevail.

Another lesson? Be careful about buying DirecTivo’s from eBay, but at least it’s nice to know that you can still use them.

Bonus to Tobin: Nice theme!

The Wall Street Journal posted an article on Friday about DVRs and new features–like programming shows via cell phones and movie downloads from the Internet.

Although the article is mostly a re-hash of current DVR features and some recent news, one interesting tidbit is that Cablevision is looking to do away with a set-top DVR and give subscribers storage space within its network for recording shows.

This would cut costs and make DVRs more invisible and accessible to users. But the WSJ says that Hollywood doesn’t like network DVRs because they violate their copyrights.

How can this be? Does where and how you store content affect the legality? Or is it just another battle between Hollywood content providers and cable/satellite companies?

I don’t know if I would like the networked DVR. I enjoy having complete control of my content on a set-top-box that I own and have in my house. Having my cable company in control seems like they might dictate what I can and cannot do with shows that I record.

And how about using my DVR as a media hub? I like being able to watch Internet content on my TV with Tivo, or watching photos from my networked PCs on my TV. Would I lose this ability with a networked DVR?

Still, I can think of a few good things about a networked DVR:

1. Unlimited Storage Space. Hopefully, my cable company wouldn’t limit how much storage I have. One way to make money from this is to offer consumers tiers of storage space, so those who save lots of TV shows can pay more per month, for example.
2. One Less Box Under the TV. If I didn’t have my set-top DVR, I’d have less clutter and more space for something else. Like a new Xbox 360 or Wii, for example.
3. Not Having to Upgrade to New DVR. Tivo Series 1 users wouldn’t have to upgrade to a Series 2 or 3. They can just upgrade to the next tier. The same thing should be possible when you upgrade to HD and don’t want to spend $800 on a Tivo Series 3.
4. Backups of DVR Content. I’d hate to lose shows that I’ve been saving for weeks or months. Having them stored off site would be great in case my DVR suddenly conks out and loses all my shows.
5. Not Buying Multiple DVRs for Every Room. This can save consumers lots of money if they don’t have to buy a separate DVR for every room. Renting an extra set-top box, for example, is much better than buying another HD DVR.

Even with a networked DVR, I’d still like to download shows to my home computer, and save them on DVDs. Perhaps the cable company will be forced by Hollywood to charge a fee for users that do this. If the fee was affordable enough, like a few dollars per show, I wouldn’t mind.

So what do you think? Are network DVRs the future? What are the plusses and minuses? Will Tivo remain viable if cable and satellite companies turn to network DVRs instead?

AT&T announced that it has added the ability for customers to record from their HomeZone DVRs using mobile phones. That’s a first for any DVR service–Tivo allows customers to program their DVRs using any web browser, but just today, Reuters said that Verizon is adding this functionality for Tivo boxes for $1.99 a month.

Although this sounds cool, I’ve never really wanted to use my cell phone to program my DVR. I’d rather do it on the web, where I can type and search for shows much more easily. Although I haven’t tried it I’m sure that smart phones like Treos are able to access Tivo’s website to search and program TV shows. (Memo to myself, add Andrew Dice Clay’s new show to my Tivo using my Treo.)

The Reuters article points out:

Analysts said such services may help attract or retain customers, but several said that only a small number of wireless subscribers are looking to remotely program DVRs. Less than 10 percent of respondents to a recent survey said they wanted such a feature, according to Jupiter Research analyst Ina Sebastian whose firm organized the survey.

HomeZone is AT&T’s satellite TV service in partnership with Echostar. AT&T says that a future feature will allow customers to trigger video-on-demand downloads to their set-top-boxes as well as access to photos remote access to photos and music.

Customers need a Web Access Protocol (WAP) 2.0-compliant cell phone or other handheld.

[Via DMW, ZatzNotFunny and Press Release]

[tags] HomeZone, AT&T, DVR, PVR, Tivo, Verizon [/tags]