Funding, promotional challenges could doom broadcast-only DVR market

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Josh Wein, FierceOnlineVideoA new web-connected, broadcast-only DVR project is trying to raise money on Indiegogo. The would-be makers of Tablo have turned to the crowdfunding site to fund and promote its new hardware. But with less than two days remaining in its fundraising campaign, the company has raised little more than half its $50,000 target.

A low-cost, broadcast-only DVR seems like it should be a hit product at a time when hundreds of thousands of cable subscribers are dropping their service each quarter. High-definition broadcast signals cover most major markets and can be received for free, a fact that still tends to surprise longtime pay-TV subscribers. With the rise in online-video options available on TV-connected devices, consumers can now put together a satisfying and inexpensive TV experience with a broadcast DVR and a few sub-$10 monthly subscriptions or a modest iTunes budget.

But even if Tablo gets funded, it will surely face some challenges when it enters the market. A handful of similar devices have already been introduced and some have failed.

Part of the problem is DVRs are expensive. The best hardware-based option available today is from TiVo (Nasdaq: TIVO). But its newest broadcast-enabled device, the Roamio, costs $200 and requires a monthly service fee that essentially pays TiVo back for subsidizing the cost of the device up front.

The Tablo seems to suffer from some of the same problems that, for me, made the otherwise interesting Simple.TV unusable. It requires external storage and does not connect directly to a TV set. That's great for streaming video to other devices like tablets, but tough for calibrating tuning. But integrated hard drives are apparently an expense these device makers have decided is unnecessary. Moreover, receiving HD broadcasts still requires the occasional antenna adjustment, a task best accomplished without the lag of a DVR or the latency introduced on a local network. Plus, Tablo is expensive. It will cost $200 to $250 and require a monthly service fee as well.

Another problem over-the-air DVRs face is they lack promotional support. While local TV station owners broadcast HD signals for free, they would generally prefer that viewers access those signals through a paying distributor such as Comcast (Nasdaq: CMCSA) or DirecTV (Nasdaq: DTV). Broadcast networks have even threatened to encrypt or otherwise hold back their HD broadcasts to thwart services like Aereo, the DVR-as-a-service broadcasters have sued to block

Even TiVo seems more focused on increasing its partnerships with cable operators than promoting its over-the-air features to non-cable subscribers. Among its newest line of devices, only the entry-level box includes an over-the-air receiver.--Josh

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