DirecTV Buys (The Remains of) ReplayTV

Posted on Thursday, December 13, 2007 by MegaZone

Things like this keep life interesting. I was surprised today to read in Zatz Not Funny that DirecTV has purchased ReplayTV from D&M Holdings, their most recent owner. Well, it is more like the remains of ReplayTV, since they really haven’t existed as much of an entity for a while now. From the Reuters article:

Japan’s D&M Holdings Inc said on Thursday it had sold its ReplayTV business, which develops software for digital video recorders, to DirecTV of the United States for an undisclosed sum.

If you’ve followed the long, sad saga of ReplayTV, this makes their fourth owner. First, they were founded in 1997 as a standalone entity, about the same time as TiVo. They released their first DVR to market shortly after TiVo did, in 1999. Failing to compete successfully, ReplayTV in 2001 was was acquired by SonicBlue. SonicBlue re-invigorated the brand and continued to market RTV DVRs as TiVo’s primary competition. However, SonicBlue themselves went bankrupt in 2003, and D&M Holdings picked up the Rio and ReplayTV brands at SonicBlue’s bankruptcy sale for just $36 million.

D&M made Rio and ReplayTV part of Digital Networks North America (DNNA). However, DNNA didn’t seem to know what to do with ReplayTV, and they quickly canceled future development of both hardware and software. One final major update, 5.1, was released under DNNA, but promised software updates such as MP3 playback, USB WiFi adapter support, and interoperability between the 4000 and 5000 series units were killed. It was reported that DNNA had dissolved RTV’s engineering group, moving some engineers to other brands, such as Escient, while most of the engineers simply moved on to other companies. ReplayTV’s last hardware update came with the 5000 series units released under SonicBlue in 2003 (before the bankruptcy), the 5500 series units were the same hardware. And the last major software update, 5.1, was released in October, 2003. There were minor bug fix releases until late 2004, but that’s all. In December, 2005 DNNA announced it was pulling out of the DVR market, and focused on simply selling off the existing stock of units, which they accomplished by early 2006.

D&M Holdings sold off Rio in 2005 to Sigmatel, and all they’ve done with ReplayTV is to slap the brand name on some new PC DVR software and rebranded hardware. The ReplayTV PC Software completely failed to find a place in the crowded PC DVR market, so it isn’t a surprise that D&M would decide to cut their losses. Or, as they spun it:

The company said the sale of ReplayTV would allow it to focus resources on its other businesses, which include high-end audio brands Denon, Marantz and McIntosh.

Basically, going back to the brands they had before they started their ill-fated diversification that included acquiring Rio and ReplayTV.

While the DirecTV acquisition is for an ‘undisclosed sum’, seeing as D&M acquired Rio and RTV both for $36 million, when both brands held a lot more value than they do today, I’d have to guess DTV picked up RTV for a song.

Dave Zatz got his hands on what appears to be a letter from D&M CEO Eric Evans to the company’s employees, and he posted this excerpt:

Today D&M announced that we have sold ReplayTV® to DIRECTV, a US-based satellite television provider. D&M will continue to provide service to the current subscribers for the foreseeable future but will not solicit additional customers. All remaining assets, with the exception of the office space and some furniture, will be assumed by DIRECTV.

So it sounds like the DTV has not acquired the existing ReplayTV subscriber base, which I’d presume includes standalone and PC users, but rather D&M has retained those subscribers and will continue to service them (providing guide data, etc). And that they will no solicit new subscribers. To me this implies two things:
1. The ReplayTV PC software is defunct effective immediately. D&M will not be continuing to sell it – no new subscribers – and I don’t see it fitting with DirecTV’s product line. Also, if DirecTV intended to continue offering the software to new subscribers, it would’ve made more sense for them to acquire the existing customers to provide an installed base to grow from. The fact that DTV wasn’t interested in the subscribers combined with D&M not acquiring new subscribers implies, to me, that the product is dead.
2. DirecTV was really only interested in the intellectual property – especially the patents. They don’t really care about the products or the service. The products are all defunct now, and the service they left with D&M.

So what does this mean about the rumors of TiVo and DirecTV reuniting once Liberty Media finishes acquiring DTV from News Corp? Possibly nothing. ReplayTV hasn’t produced new DVR hardware or software since 2003, and all of the old RTV engineers are reportedly no longer with the company. Even if DTV acquired the PC software development group, developing for the PC and developing for specialized hardware aren’t the same thing. I don’t see DTV forming an ‘in-house’ DVR group based on the RTV software, let alone the hardware. The hardware is completely obsolete – the design is over 5 years old now. It isn’t even useful as a starting point, so just ignore that. The software is over four years old now, which is pretty stale in such a rapidly changing market. It would have to be brought up to date to start, ported to new hardware, and then be modernized with all of the features required to be competitive today, as well as to handle DTV’s systems. That’s a lot of work.

And it would be unusual for DTV – they’ve always outsourced that kind of work. Even the DirecTV branded set top boxes are produced by other vendors. TiVo has experience writing an OS for DirecTV, and they’ve maintained that capability in their code base even since the split. They’re already working on a new update for DirecTV’s existing TiVo-based units for 2008. The relationship is in place, the software is in place, and it wouldn’t be hard to produce a new STB based on the TiVo HD for DTV – just as they’re localizing it for Australia and DVB-T.

So why acquire RTV? Patents. As one of the early developers of DVR technology, ReplayTV, like TiVo, has some fundamental patents. Years ago ReplayTV and TiVo even sued each other, and settled out of court with a cross-licensing agreement. That agreement could well have transferred to DTV with the purchase, which would help insulate DirecTV from lawsuits like the one that TiVo has against DISH Network. It would also give DirecTV a better bargaining position in any negotiations with TiVo for future partnership agreements. And it would give DirecTV some capability to go after the competition and their own DVRs for patent infringement.

If my speculation that they picked up RTV for a song is correct, it was likely a very cost effective move on their part. (It kind of makes me wonder why TiVo didn’t snap up RTV for themselves, to consolidate their portfolio.)

I don’t expect to see a rebirth of ReplayTV out of this. I plan to ask some questions of DTV at CES next month, but I suspect that this purchase was all about the intellectual property and not at all about the software itself. I guess we’ll see if I’m right in time.

About MegaZone

MegaZone is the Editor of Gizmo Lovers and the chief contributor. He's been online since 1989 and active in several generations of 'social media' - mailing lists, USENet groups, web forums, and since 2003, blogging.    MegaZone has a presence on several social platforms: Google+ / Facebook / Twitter / LinkedIn / LiveJournal / Web.    You can also follow Gizmo Lovers on other sites: Blog / Google+ / Facebook / Twitter.
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  • pog

    You’re very wrong to boldly insist that RTV’s software is “stale” and that it needs to be “modernized with all of the features required to be competitive today”. The software is so good, it’s better than anything Tivo has ever created. I could list you a plethora of features that RTV’s 5 year old software offers that Tivo in all this time hasn’t figured out.

    To name a few:

    - Commercial skip
    - Unlimited buffer
    - Recording from other sources (VCR, DVD, unlisted channels, etc)
    - Line 1, Line 2, RF3 input
    - Better audio/video quality all around – especially on lower settings

    The ONLY advantage Tivo has is the ability to record within the buffer. Multi-tuners and HD are features that RTV would have easily added had they still been around.

    Tivo is DVR for dummies. Click and record. RTV’s rich features was its downfall in a dumb consumer market that couldn’t even figure out how to set VCR timers.

    RTV’s 5 year old software is better than Tivo’s ever was or is.

  • http://www.gizmolovers.com/ MegaZone

    First, the points you listed:
    - Automatic commercial skip – gone. It was removed in the 5500 and is unlikely to return as it was lawsuit bait. The 5500 does have a one-press skip which is OK, TiVo has 30 second skip. Both work.
    - Unlimited buffer. Sure – but big deal. I’ve been active in the DVR community for over 5 years, and very, very, very rarely do people say “I wish I had an unlimited live buffer.” RTV is the only DVR I know of that did that, which also shows you how much demand there is.
    - Recording from other sources. The DVD TiVos do that officially. Other TiVos have had a ‘backdoor’ – tune to channel 0 to record whatever from the A/V input. And you can manually tune a TiVo to a channel number if you need to. Also, *any* DVR lets you record from other A/V inputs by the simple expedient of *lying*. Connect your source instead of a cable box, or whatever, and tell it to record some time on any channel, then play your source. The DVR will happily record it. And you can also transfer video from a computer to the TiVo, officially.
    - Line 1, Line 2, and RF3 input – what exactly good are this for the normal user? Serious question. I don’t even see RTV fanatics touting these.
    - Better A/V quality. 1. Moot with digital sources like digital cable, ATSC, or satellite. The DVR records the pre-compressed digital signal. What you receive is what you record. And for analog models, this is opinion, not fact. And it has been hotly debated for years – since the two products launched actually. You’ll find plenty of people who claim TiVo looks better than RTV, and plenty of people who claim that RTV looks better than TiVo. The fact is that they both encode MPEG-2 on the fly with single pass encoding, and they have different MPEG-2 settings. That means that RTV may very well look better on some content, and TiVo can look better on other content – when the content is best suited for their MPEG settings. There have been a number of A/B tests with RTV and TiVo over the years, with no common result. ALSO, it depends GREATLY which models you mean. With TiVo the S1, S2, DVD combo, S3, and TiVo HD all have *different* MPEG settings. The S1 and S2 boxes record at 480×480 for Best and High, for example, while the DVD units record at 720×480 and at much higher bitrates. The S3 and TiVo also record at much higher bitrates. So the image quality on those units is markedly better at higher settings than on the other units. And it isn’t even constant over time, TiVo tweaks the MPEG settings periodically in new releases.

    So a blanket statement of ‘RTV looks better than TiVo’ is hogwash. ‘And RTV 5000 looks better than a TiVo Series2 on Content X’ would be a better statement.

    Also:

    Multi-tuners and HD are features that RTV would have easily added had they still been around.

    Thanks for making my point – the code is STALE. The fact they they HAVEN’T been around, and therefore HAVEN’T evolved the code to keep up with the market, is kind of the definition of the code being stale!

    Now, to counter:
    - TiVo has a much better recording management system with clear, priority based conflict resolution. This is the number one thing even RTV fanatics will state. And RTV even shifted their system to partially copy TiVo in the 5.1 software. But they didn’t do a complete job.
    - TiVo has Wishlists, which are incredibly useful and powerful. RTV doesn’t have a decent equivalent.
    - TiVo has native USB WiFi support. RTV promised that and didn’t deliver.
    - TiVo allows you to view digital photos over the network. RTV’s photo support requires you to hard partition the drive to dedicate space to photos, then *copy* the photos to the RTV.
    - TiVo supports network playback of digital music. RTV promised it and didn’t deliver.
    - TiVo supports online recording requests – WITHOUT any blackout window. Even on broadband RTV has a 24-hour blackout window. You’d think they were still using modems. Oh, and TiVo has partnered with Yahoo!, AOL, TVGuide, and Zap2it.com so you can schedule recordings from all of those sites too.
    - TiVo supports movie rentals and purchases from Amazon Unbox. RTV talked about broadband features and never delivered.
    - TiVo also has TiVoCast content, free video downloads.
    - TiVo has a slew of broadband features – Yahoo! Traffic & Weather, Fandango movie tickets, Live365 & Rhapsody music, Music Choice free music videos, Picasa and Photobucket viewing, podcasts, etc. RTV – nada.
    - TiVo also has the Home Media Engine API for 3rd party applications, which allows for sites like Apps.tv and PlayTeeVee.com, as well as 3rd party applications like Galleon and AudioFaucet. TiVo has a LOT more 3rd party support than RTV – which mainly has DVArchive.
    - TiVo has official support for transferring video from the TiVo to a PC, and from a PC to the TiVo. RTV doesn’t – it only works because RTV didn’t secure their box-to-box protocol. (Which DTV would pretty much have to secure to get away with a new box in the market.)
    - TiVo has KidZone, which many parents love.
    - TiVo has searching that spans local and broadband content in one search, Guru Guides, and other unique features.
    - TiVo actually has a To Do List! (I oculdn’t resist that dig – it has long been one of the major complaints from RTV owners.)
    - TiVo has TiVo Suggestions, which is a nice feature. (And if you don’t like it, just ignore it – or turn it off.)
    - TiVo’s code is Linux based and there is a large, active hacking community offering many options. RTV’s code runs on a commercial, proprietary embedded RTOS and there are basically no hacks to run on the box itself because of that.

    RTV does have a few features that I’d like to see TiVo add. While it isn’t officially supported, RTV has an API on the box that lets you control a lot of the functions over the network. I’d like to see TiVo expand their current API to be more like that. RTV shows which programs will record in the Guide, TiVo doesn’t. And that’s always been kind of disappointing – even though I don’t use Live TV, or the Guide, well – EVER – I think it should be there for those who do.

    RTV had component outputs first (and VGA on some units IIRC, I don’t feel like looking it up now). TiVo didn’t get those until the DVD units, and now on the S3 and HD. Of course, the latter also have HDMI now.

    RTV has some other bells and whistles, like being able to jump to a specific minute/second – but while those are nice ‘gee-whiz’ things, as a geek, they aren’t really that useful as general consumer features.

    TiVo always had features RTV lacked, and vice-versa. Having tried both, I felt TiVo was simply a better DVR – it had a MUCH clearer, more reliable scheduling system and Wishlists, which were the most important functions for a DVR. Everything else was just extra. RTV’s scheduling system, with theme channels, etc, was obtuse and overly complex. (Which is why RTV eventually partially copied TiVo.) Both RTV and TiVo continued to add features – but RTV stopped over four years ago, and TiVo picked up their pace. RTV talked about DVD combo units (I heard the interview with a SonicBlue exec myself) – TiVo delivered the product. TiVo delivered dual tuners. Then HD and CableCARD.

    A LOT of work would need to be done to RTV’s code base to:
    1. Port it to modern hardware, dual tuners, refresh the UI, etc.
    2. Add support for DBS tuners, and probably OTA ATSC tuners as well (as DirecTVs consumer HD DVRs support ATSC and satellite).
    3. Add features to at least give it market parity to be competitive. It would, at a minimum, need to do as much as the DirecTiVos and NDS DirecTV DVRs.

    And, to make all of this harder, you’d have to get engineers to first decipher the existing code base. One of the hardest things to do as a developer is to take someone else’s code, especially stale code, and first understand what it is all doing – and WHY it is doing it that way. It is difficult when you have the engineers who wrote it as resources, it is damn frustrating when you don’t. If the reports that all the old RTV engineers are long gone are true, it would be a difficult task. And it isn’t exactly a simple code base.

    TiVo already has working DirecTiVo code. In fact, it would be trivial for them to make it feature competitive with the standalone boxes – the code is in there, just disabled by DirecTV’s request. DirecTV and TiVo have already announced a code update for the existing boxes in 2008 – that could easily be the basis for a new platform. And, speaking of new platforms, the TiVo HD was designed as a reference platform that can be readily re-purposed for new markets – like DVB-T for Australia. Supporting DBS for DirecTV wouldn’t be hard.

  • http://hdtivo.wordpress.com/ HDTiVo

    The first thing that came to mind is that quite some time ago DTV and MSFT announced they were working to bring DTV tuner to the Windows PC, and perhaps the software from Replay could play a role.

    Do you know what has happended to the idea?

  • http://www.gizmolovers.com/ MegaZone

    The DirecTV for Vista project seems to have faded away – neither camp has mentioned it in a long time. And when it was announced the idea was that it would add DTV support to Vista’s build in Media Center, so I wouldn’t expect them to need, or even want, 3rd party software involved.

    I’ll try to find out what’s up at CES.

  • Susan

    That is the saddest thing I have read in a while. I love my replaytvs. I think the things I disliked about Tivos the most initially was that annoying sound it makes, the horrible bar that pops up on the lower screen every time you press any button and covers the subtiles (so you can’t check how much movie is left and watch it t the same time), and that you can’t stream between units. It actually downloads a copy to the other tivo, taking up that machine’s hard drive.

    I want my replaytv units to be useful forever – ha ha. I am already frustrated that digital tuning will require me to have multiple cable boxes in one location (since I have picture-picture and want to record while I watch something else). They are really designing entertainment technology for simpletons and not for the geekier crowd in my opinion.

  • http://www.gizmolovers.com/ MegaZone

    Susan – There are a few solutions to the issues you mention:
    1. The system sounds can be set to low, medium, high – or off. So you can turn off the sounds completely. I actually like it, I find the audible feedback quite useful.

    2. The progress bar has a ‘quick clear’ setting to make it go away faster. And if you press ‘Clear’ on the remote it will go away immediately.

    3. The copying vs. streaming isn’t so bad. You can watch the program while it is still copying, so you don’t have to wait for it, and while it will use disk space while copying and viewing, you can immediately delete it. It would still be nice for TiVo to add streaming at some point, but having the ability to copy is nice too. Though I don’t use it much anymore, since my main TiVo is a dual-tuner S3. I used to use my bedroom TiVo as a second tuner and then copy shows to the living room regularly. Now I don’t need to do that.

    The need for two cable boxes would be solved by a dual-tuner DVR, like the TiVo Series3 or TiVo HD. Not only dual-tuners, but native digital cable support, including HD recording.

    I’m a fairly hardcore geek, and I prefer TiVo to ReplayTV for a number of reasons. I tried them both before buying my first TiVo in 2002. I felt the TiVo was more powerful and even geekier than the RTV, because of the ability to do advanced scheduling with WishLists and all of the hacks available since it runs Linux. There is an even higher geek factor now, with Home Media Engine.

    ReplayTV was a good product, and the only real direct competition TiVo ever had, but they just couldn’t seem to get traction in the market.