announced the launch of a new priced significantly lower at $299 than previous versions. The lower pricing is attractive, but so too is its compatibility. The new HD DVR can also act as a set top box for subscribers, by meeting the new FCC mandate for retail set-top-boxes that are CableCARD compliant. It will be one of the first cable compatible set top box entrants in the retail space. The new box has other value add features including access to online content, particularly through TiVo’s partnership. “It is the ultimate media centerpiece for the living room with the broadest selection of broadband content, right alongside your favorite broadcast and cable programs, giving HDTV viewers more choice and control than they’ve ever had before. And it can be used in place of the customer’s existing cable box,” says Tom Rogers, CEO and President of TiVo.

This new development could set up a perfect storm for cable competitors. On the surface, the box is quite compelling. It combines HD and DVR functionality with a cable set top box for a relatively acceptable price point of $299. In addition, its retail presence allows cable companies to reach a captive audience, especially among HDTV purchasers. TiVo already has established partnerships with and , but this new development conceivably extends de facto relationships to other cable providers. The impact on IPTV service providers may be more acute. At least has a strong retail presence and can work to counter any potential success this new device may have in the marketplace. But operators have limited retail footprints, at least as it relates to consumer electronics retailing, where that captive audience will be present. Additionally, smaller telecom service providers beyond AT&T and Verizon who offer video services are challenged with DVR and HD applications. This new competing TiVo set top box may accelerate the competitive disadvantage faced by smaller IPTV operators who have limited DVR and HD options.

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