TiVo Unveils Low-Cost, High-Definition Recorder

TiVo(TIVO Quote - Cramer on TIVO - Stock Picks) has introduced a cheaper version of its high-definition digital video recorder in a bid to broaden its subscriber base and get a stronger foothold in the fast-growing market for HDTV-related products.

TiVo said its latest 'TiVo HD' DVR has been priced at $299.99, much lower than its $800 Series 3 HD DVR model introduced last year. TiVO HD allows users to store 20 hours of high-definition content, compared with 32 hours in the more expensive model. TiVO HD was available for pre-orders in July.

"It's a defensive move to hold on to a customer base that is buying HDTVs but wants an affordable TiVo DVR," says Van Baker, vice president of media for Gartner's Industry Advisory Services.

Sales of high-definition televisions are booming as prices fall and the TVs get prominent play in retail channels. HDTV sets, which made up 21% of overall TV sales at the end of 2004, are expected to become 70% of all TV sales by the end of 2010, according to JupiterResearch. About 63% of U.S. TV households are expected to have an HDTV set by 2010.

Shares of TiVo were up 12 cents, or 1.9%, to $6.17 in recent trading. The company's stock is up 21% in the year to date.

TiVo has been locked in a fierce battle to hold on to its market share after cable and satellite operators introduced generic, lower priced versions of DVRs. Alviso, Calif.-based TiVo has fought back by making distribution deals with companies including cable provider Comcast(CMCSK Quote - Cramer on CMCSK - Stock Picks) to offer TiVo's DVR service to Comcast subscribers.

TiVo hopes to get its Comcast service rolling this summer.