Microsoft creates their own standalone DVR platform

Michael Gartenberg | January 05, 2005, 09:39 PM

I've been excited about this one since I first heard the news. As part of their digital home efforts, Bill Gates announced as part of his keynote Microsoft is releasing a standalone DVR/DVD-Burner platform to compete with the likes of TiVo. First to market will be a new box from LG later this year. These units will have a look and feel similar to the Media Center PC platform but will not be traditional PCs nor will they be usable for PC tasks such as running Office. They will have the standard Windows EPG and will be able to burn content to DVDs. Since they support Windows Connect, they will be able to stream music and pictures from your PC and also be able to transfer TV content to your PC for syncing to a portable media center. Media Center Extender technology to connect to a media center PC is also planned but won't necessarily make it into the final release.

This is a bold move that will put Microsoft head to head with TiVo in trying to win the hearts and minds of CE vendors and consumers to adopt their platform. Some features are lacking in V1, such as the ability to connect a portable media center directly to the device or the ability to use the box to dump footage from a digital camcorder. One key area that Microsoft can differentiate is price. If Microsoft and their partners are smart enough to eschew the monthly service (or lifetime fee) that TiVo currently charges customers, they have a better shot at taking the lead in the marketplace over TiVo. 

Even without a service fee, Microsoft will still need to overcome the basic marketing challenge that all DVR systems face in the market. They will need to work hard to get consumers to realize there is such a thing as a DVR experience and the benefits associated with it. In addition, they will need to show that Microsoft's DVR offering is a premium service worth paying extra for, above and beyond what consumers can get from cable or satellite companies.