TiVo, Minus the Tangle

The new HD set-top box is a delightonce you get it running

When I wrote about the new world of consumer-friendly set-top cable boxes in June, I was longing to be free from the clutter of boxes, wires, and remotes that make a mess of my video system (see BusinessWeek.com, 6/7/07, "Unchained From the Cable Box"). The new TiVo HD isn't quite the set-top box of my dreams, but it comes pretty close. And it is a harbinger of better things that will be here soon.

The TiVo (TIVO) HD costs $300, plus a monthly fee of $17 that can be reduced through prepayment or a multiyear contract. It's the first major recording device of this sort to hit the market since July 1, when new Federal Communications Commission rules took effect, making it easier for consumers to purchase their own cable boxes. In theory, cable subscribers now should be able to buy a box at a retail store, obtain a small device (or two, in the case of the TiVo) called a Cablecard from the cable company, plug it all in, and be up and running.

Cable's Need to Catch Up

The reality is something else: It took Comcast (CMCSA) installers two trips to my house—a total of about four hours' work—and extensive consultations with TiVo technicians to get the unit running properly. This isn't going to cut it. Cable operators and their research arm, CableLabs, must make plug-and-play a reality or the cost will be ruinous.

Once the TiVo was working, it was a delight. The HD has most of the capabilities of the TiVo Series3 at less than half the price. You can get rid of your existing cable box, record one show while watching another, or record two shows at once. Here's the relatively minor downside: The system lacks the premium THX audio output. It stores just 20 hours' worth of high-definition programming, compared with 32 hours on the Series3. And like all third-party Cablecard products, it cannot handle on-demand or pay-per-view programming.

It's a source of endless astonishment to me that in the eight years since the first TiVo box hit the market, the cable companies and the two makers of most of their set-top boxes, Motorola (MOT) and Cisco's (CSCO) Scientific Atlanta, have never come close to matching TiVo's ease of use. TiVo still runs rings around the cable carriers' best boxes with its speedy response to remote-control clicks, its well-organized and easy-to-search program guide, and its really fast fast-forward.

Finally, Choice

Products like the HD have ushered TiVo into the quickly expanding world of Internet TV, albeit in a limited way. You can get local weather or traffic and share photos through Yahoo! (YHOO), and you can even upload your homemade movies to video-sharing site One True Media. If you forget to record a program before leaving home, you can do it from the office on TiVo's Web site. You can check movie schedules and buy tickets through Fandango. And you can rent or purchase movies and TV shows through Amazon.com's (AMZN) Unbox download service. TiVo's "Universal Swivel Search" lets you hunt for shows available on the cable system and from Internet sources with one query.

Unfortunately, there's a lot of Web content you can't get to, including YouTube and such network sites as Viacom's (VIA) Comedy Central. And while TiVo offers a smattering of podcasts, it doesn't come close to the array of audio and video podcasts available through Apple TV (AAPL). The lack of a DVD drive in the TiVo means I need one more box in my video system, and it makes archiving recorded programs harder than it should be. For what it's worth, TiVo HD does include an archaic "save to VCR" feature.

These, however, are minor quibbles. TiVo HD represents a huge step toward providing consumers with affordable set-top boxes that are both easier to use and richer than what cable companies have been offering. Indeed, TiVo's approach is so successful that it is starting to infect cable. By the end of this year some lucky Comcast subscribers in New England will get Motorola boxes with TiVo software. It looks like the start of an era of true competition that will give us choice in how we watch video entertainment.

Before it's here, it's on the Bloomberg Terminal.