ReplayTV Hits 'Stop' on Advertising Bypass

The maker of ReplayTV is adding a new feature to its video recorders: commercials.

Bowing to pressure from Hollywood studios and television networks, Digital Networks North America is eliminating the recorders' abilities to skip commercials automatically and send shows through the Internet, two of ReplayTV's most celebrated and controversial features.

Executives at DNNA, the D&M Holdings Inc. subsidiary that bought the Replay line from Sonicblue Inc., said they made the concessions to cooperate with the entertainment companies and be "a positive force in the industry."

The major studios and TV networks sued Sonicblue in federal court in Los Angeles two years ago, arguing that the ReplayTV 4000 models abetted piracy and undermined programmers' ability to make money. Studio executives said the changes, which will be introduced in new ReplayTV models later this year, were a step in the right direction.

But consumer electronics and technology advocates said they were troubled by Hollywood's ability to push DNNA to remove consumer-friendly features that had never been declared illegal.

"This is the great fear," said attorney Fred von Lohmann of the Electronic Frontier Foundation, a civil liberties group that sued the studios and networks on behalf of five ReplayTV owners. "Do you really want copyright owners to be calling the shots on what kind of features technology companies can offer consumers?"

The dispute is significant for Hollywood, device manufacturers and consumers because ReplayTV's personal video recorders, or PVRs, represent a new breed of machines that could transform the way entertainment is delivered to and experienced in the home. Though PVRs so far have reached fewer than 3% of U.S. homes, they promise to let consumers receive and store huge libraries of music and videos, potentially reducing demand for movie rentals, pay-per-view programs and DVDs.

Despite the concessions, DNNA may not have done enough to satisfy all of the studios and networks, which sued Sonicblue for copyright infringement and unfair business practices in the fall of 2001. That suit was put on indefinite hold when Sonicblue filed for bankruptcy protection this year.

Santa Clara, Calif.-based DNNA tried in vain to negotiate a legal cease-fire with Hollywood, but some of the entertainment companies wanted DNNA to eliminate more features. Sources familiar with the discussions said the main targets were the recorders' ability to fast-forward through shows in 30-second increments -- the length of the typical TV commercial -- and to store programs for an unlimited amount of time.