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Time Warner Cable Hits Fast Forward

26 Jun, 2003 By: Thomas K. Arnold

There was an interesting story in the business section of the San Diego Union-Tribune the other day. In a classic example of the “if you can't beat ‘em” philosophy, Time Warner Cable is rolling out a new service in this sunny Southern California city that lets subscribers record up to 40 hours of programming and watch it at any time.

The company is effectively trying to beat digital video recorder (DVR) services like TiVo at their own game. Time Warner is offering this service as an add-on to its basic digital cable service, with a free equipment upgrade — the DVR is housed right inside the set-top box — and a monthly rate of $10.

Time Warner is not alone. Cox Communications, the other main cable provider in the San Diego area, plans on rolling out a similar service before the end of the year.

I must applaud the cablers' shrewdness. DVR was, and still is, viewed as the Great Enemy of Commercial Television, since it allows consumers to time-shift and bypass commercials. The TV industry fears this, because if no one's watching commercials, who's going to pay those outrageous advertising rates?

But by embracing the enemy, the cable companies not only have an additional revenue stream, they also have a further hedge against free TV, which they've been attacking and trying to kill ever since the concept of cable television was first floated a generation ago.

It's an interesting marriage, and one that begets this question: Will we eventually see a troika, a technological three-way, if you will, in which a DVD player is thrown into the mix?

Smart money says yes — and soon. Already, Pioneer has announced a deal with TiVo build a high-end DVD player and recorder using TiVo technology. At a minimum of $1,200 for an 80-gig hard drive, we're hardly talking mass market.

But in time…

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