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TIVO LEADING A REVOLUTION DIGITAL RECORDERS CHANGING TV VIEWING, ADVERTISING.

Byline: Brent Hopkins Staff Writer

Earl Manahan doesn't worry if his phone interrupts while he's watching his beloved Lakers - he'll just TiVo the game.

More specifically, the Valencia systems analyst will use his digital video recorder to capture Shaq's dunks, pausing and replaying the live event at his leisure. Though there are several brands of DVRs on the market - Manahan favors ReplayTV, himself - the burgeoning technology has become synonymous with its leading provider, Alviso-based TiVo Inc.

The technology got a big boost this week with the now-infamous Super Bowl halftime show that left Janet Jackson's bare breast briefly exposed to cameras, with numerous celebrities saying they'd rush home to check their TiVo and which the company claimed was the most replayed moment in its history. Analysts think this could be its breakout year, signaling a change in television programming, advertising and viewing.

``Once you watch on these, you don't have to worry about getting up,'' Manahan said, picking up his second DVR at a Northridge Circuit City. ``You'll never miss anything again.''

That's the big draw of TiVo and its cohorts - they transform live television into a controlled medium by recording directly onto a hard drive, on which users can store hours of programming. No firm numbers exist on the number of adopters, though analysts project them to be above one million and growing. Once users sign on for the service and plug in their televisions and a phone line, they become dedicated viewers. Research provided by CBS shows they are 22 percent more likely to watch a network program than a regular watcher, picking their favorite shows and watching them at their convenience.

``Once people get it, there's no going back,'' said Kimber Sterling, TiVo's director of advertising and research sales. ``People didn't know why they needed a DVR, but once they have one, they really see how it can change things for them. You no longer have to make an appointment with your favorite program, you can watch it whenever you want.''

The higher frequency of viewing makes DVR watchers a valuable commodity for networks, and TiVo signed with Nielsen Media Research this week to provide viewership data to them. But with the added interest in TV comes a downside for broadcasters: Watchers are far more likely to record programs, then skip through commercials.

``It was the best investment ever,'' said a grinning Chris Trigg, shopping this week at a West Los Angeles Best Buy. ``You can skip right through the commercials in three seconds, and instead of sitting on the couch, hoping something's on, there's always something you want to watch.''

NBC's data show DVR users skip through 70 percent of commercials, which could lead to a projected 28 percent commercial exposure loss if every household had the technology. David F. Poltrack, executive vice president of research and planning for CBS, presented the figures at an investment conference in December, downplaying the negative impact.

``While these levels of commercial exposure loss are significant, I think you would agree that they do not pose a threat to the viability of television advertising,'' he said in his speech. ``Also, our research suggests that the loss of commercial exposure for the popular network television series may be offset by more viewing of these programs.''

The other networks declined to speak on the issue. Media analysts see a return of sponsored television and increased product placement as a means to combat users who'd otherwise fast-forward through ads.

With prices dropping - TiVo's 40-hour machine now costs $199, ReplayTV's costs $149, with monthly subscriptions near $13 - and cable providers beginning to offer their own DVR machines, analysts think the technology will soon be mainstream.

``Eventually, everyone will have this through local cable or TiVo itself,'' said Robert Thompson, director of the Center for the Study of Popular Television at Syracuse University. ``It'll have some really significant effects on the TV industry, even more so than the VCR.''

Brent Hopkins, (818) 713-3738

brent.hopkins(at)dailynews.com

TV RERUNS

--Both industry leader TiVo Inc. and ReplayTV introduced digital video recorders (DVRs) in 1997. The devices record television onto hard drives, allowing for pause, replay and storage of live programming.

--Both currently offer an array of machines, with ReplayTV's 40-hour machine retailing for around $149 and TiVo's selling for $199. Both require a monthly subscription fee of about $13.

--TiVo claims a user base of more than 1 million; ReplayTV does not release figures.

--TiVo viewership of this month's Super Bowl halftime ``wardrobe malfunction'' climbed 180 percent.

CAPTION(S):

3 photos, box

Photo:

(1 -- color) Earl Manahan of Valencia picks up a digital video recorder Wednesday at Circuit City in Northridge. Analysts think this could be the breakout year for DVRs, heralding a change in television programming, advertising and viewing.

(2 -- color) (Warren Aguiling, a product specialist at Circuit City in Northridge, gives a demonstration Wednesday on how a TiVo digital video recorder works.)

(3) Warren Aguiling of Circuit City in Northridge stands next to a menu screen for TiVo, a digital video recorder that could spell profound changes in television viewing and advertising practices.

Michael Owen Baker/Staff Photographer

Box:

TV RERUNS (see text)
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Title Annotation:Business
Publication:Daily News (Los Angeles, CA)
Geographic Code:1USA
Date:Feb 7, 2004
Words:860
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