SONICblue Hits the Auction Block

turkeywrap writes "Looks like there's no hope for SONICblue, makers of ReplayTV and Rio MP3 players. An agreement with D&M holdings (parent company of audio equipment makers Denon) fell through, so now a bankruptcy court will hold an auction for both of the main business units, ReplayTV and Rio, on April 15. Glad I bought my tivo."

Comments

What about the ReplayTV users?

[Anonymous Coward]

Not being the U.S I have no idea, but does ReplayTV not operate on the same basis as Tivo E.g. you pay a subscription to recieve the programme data? If that's the case, what will happen to all the ReplayTV users? Would there be anyway to recieve data from an alternative source, or are they all S.O.L?

Re:What about the ReplayTV users?

[MindStalker]

Well the Tivo can be hacked to use an alternate provider as the Tivo runs linux at its core. While the replay doesn't and is much harder to hack. So I would assume they are SOL, but I'd be willing to bet that the service part will be auctioned off, and someone will buy it, but possibly not.

Re:What about the ReplayTV users?

[RobotRunAmok]

There are a number of billing services (e.g., CableData) in the US who routinely prepare various flavors of program schedule downloads and attendant metadata for the purpose of populating cable TV on-screen displays, billing systems, etc. The DBS providers (DirecTV et.al.) do their own collation. I gotta think this is a great opportunity for one of these shops to expand subscriber base substantially without adding much work.

These companies have already whipped the toughest part -- establishing a regular system wherein the networks provide you with the info in a form you can manipulate -- so the rest should be gravy.

TiVo

[mrpuffypants]

As much as people speculate that TiVo is going under (about as much as the rumors that Apple will fail as well) they seem to be a company with well-defined goals and a good marketing plan.

TiVo's now just as recognizable as "Xeroxing" a document, or buying some "Kleenex". Now that they've entered the lexicon for a large part of the world I think they will have tremendous staying power.

Also, they've treaded lightly in regard to their new "Home media option," which allows people to share TV shows across a home network, and play pictures and music on their TiVo's. A careful use of copyright protection has, so far, kept them out of the legal wranglings that SonicBlue had to face the minute that every major media company in the world sued them after the ReplayTV product announcement.

What if...

[Quixote]

Glad I bought my TiVo

What if it was the other way around, and TiVO was going under? Obviously you wouldn't be too happy (of course), but the bigger question is: will SONICBlue release the specs of their service, so that others can now provide it ? Would TiVo release these specs if they were going under? Or will the bankruptcy court treat these as trade secrets, worth some monetary value to the creditors, and prevent the release?

I'm just wondering what the future holds for such fee-based services, where the fees are taken upfront. Will the people who forked over the $300 (or whatever) for "lifetime service" be considered creditors too? Shouldn't they be?

Re:What if...

[Zathrus]

the bigger question is: will SONICBlue release the specs of their service, so that others can now provide it ? Would TiVo release these specs if they were going under? Or will the bankruptcy court treat these as trade secrets, worth some monetary value to the creditors, and prevent the release?

TiVo stated once upon a time that they'd do this. Fat chance. A judge will certainly rule that this is information of value and prohibit any official release of information.

That said, there are TiVo hackers that have figured it all out already, at least for Series1 boxes. The S2 boxes are locked down more tightly (although it's being cracked very, very slowly), so dunno about that yet. DirecTiVo's aren't even under the perview of TiVo anymore, so unless DirecTV went tits up you'd still have service on them.

Will the people who forked over the $300 (or whatever) for "lifetime service" be considered creditors too? Shouldn't they be?

They are considered creditors. Of the lowest class (which is pretty much where creditors are anyway in bankruptcy court). Most creditors are lucky to see ten cents on the dollar after bankruptcy court, so it may be that you'd get a few more months or weeks of service and that'd be it. Depends on how the judge rules... with the obvious issue that pissing off your customers is not a good way to get out of bankruptcy. Based on that I'd be surprised if any judge would invalidate the lifetime service option.

Oh, you mean what happens if the company went really and truely bankrupt? And nobody bought the assets? Well, then you're still being treated like a creditor. And you're getting the same thing any other creditor in your situation would get - absolutely nothing. The various bits of IP may be sold off, but that doesn't mean you'll get access to any of it - including things like how to download scheduling data.

I suggest you look into what happened to any one of the failed "Internet PC" companies to see what would happen to your hardware. Unless you hack it, you're going to wind up with a large doorstop.

Re:What if...

[MarkGriz]

The TiVo hacking community would be quite capable of "unlocking" the box, or getting it to download alternate program guide information if it came to that. They have not so far because they have no desire to piss TiVo off, but would rather peacefully coexist. TiVo has been generally supportive of the hacking community and will probably continue to be, so long as no attempt is made to deprive them of their main source of revenue (subscriptions, not hardware). I'd venture to say that Tivo's support has probably gone a long way in helping promote their product.

The TiVo community forum is a great resource for all thing TiVo. Having just got a Directv Tivo box (which is awesome, by the way), I intend to be spending alot of time there, learning as much as possible.

Re:What if...

[guacamolefoo]

Will the people who forked over the $300 (or whatever) for "lifetime service" be considered creditors too? Shouldn't they be?

They are considered creditors.

Correct so far.

Of the lowest class (which is pretty much where creditors are anyway in bankruptcy court).

Wrong. Creditors come ahead of the equity owners of the company. Unsecured creditors, which is what the customers essentially are, are in a poor position, but they do not have the last tit -- that is reserved for the lucky, lucky investors (i.e. the people whose money was just pissed away). You might know them as "shareholders" or "the rich" or "pension plans" or "your 401(k)" or "mutual funds".

Most creditors are lucky to see ten cents on the dollar after bankruptcy court,

Depends on the company and the type of creditor, but secured creditors can do quite well in bankruptcy. Sometimes, it is groups of creditors that force a company's hand and put a firm (or individual) through an involuntary bankruptcy. While you may feel thoroughly evil when you do such a thing (I did this once), it can really save a creditor's bacon to shut down a company rather than letting it flounder under a shitty business plan or under shitty management.

so it may be that you'd get a few more months or weeks of service and that'd be it.

Probably right. Two types of bankruptcy exist for businesses -- Chapter 11 (reorg) and Chapter 7 (liquidation). Chapter 7 is death city. Sell it all, pay creditors according to a plan that the bankruptcy trustee devises and that the bankrutcy judge approves. Chapter 11 lets the company convert debt into equity (usually) and it lets the company shitcan some contracts that it has, reaffirm others, and basically try to salvage the cashflow positive business segments while jettisoning the shit. This tends to help out customers, employees, and creditors. Some suppliers and customers and equity owners get killed, but the net disruptive effect to the economy is much reduced versus killing off the whole company in a liquidation.

Depends on how the judge rules...

And what the trustee's plan is. Ans what the creditor's committee comes up with.

with the obvious issue that pissing off your customers is not a good way to get out of bankruptcy.

Au contraire. If you can jettison certain contracts, including money-losing ones with customers (which means throwing some consumers overboard) you might actually save the rest of the business. This results in a more stable foundation for serving your other customers in profitable segments, and increasing their willingness to do business with you. Businesses don't want every customer, they only want profitable customers. My business fires clients all the time and I note significantly that we are nowhere near bankruptcy. Sonicblue can do that in bankruptcy and help themselves out tremendously. There may be some blowback, but it will fade. Plus, blowback beats the hell out of destroying the company to try to keep an unprofitable business segment afloat.

Based on that I'd be surprised if any judge would invalidate the lifetime service option.

It's really not up to the judge. It is up to the trustee. The "lifetime service option" is just a contract. Sonic Blue will be able to determine which contracts it wants to void and which it must honor. I bet they toss the replay tv business. Then, the "value" of those services becomes an unsecured debt that goes to the end of the creditor line. The judge will then rule on a plan for sonic blue that the trustee comes up with, subject to input from the creditors (and it is unlikely that the replay tv people will collectively or individually have much say). I doubt that the replay tv people will get much love under these circumstances.

Don't get your hopes up -- you are likely looking at an unpleasant screwing and you won't even get a reach around. I'm not being a troll here, it's just that you need to be realistic about what is going to happen. Bankruptcy is not a place for rose-colored glasses.

GF.

Re:Tivo

[Zathrus]

Does Tivo now have any reason to compete? I see no reason to.

Depends on if TiVo wants to continue existing or not.

Both Scientific American and Motorola are developing PVRs for cable set top box's. And these two companies have huge existing relationships with the cable companies (as in - they sell virtually everything the cable companies need to do business). If you have a cable STB right now take a look at it - it's almost certainly made by one of these two companies (General Instruments are OEM'd Motorola boxes).

AOL is also working on the Mystero box or whatever crappy name it has. Dish Network has their own PVR.

None of these are comparable to TiVo on a feature basis, and often they're missing really big features, but to a lot of people all that matters is price -- and all of them beat TiVo on that because the companies can afford to give the hardware away for free and charge an additional monthly service charge to pay it back as well as pay for providing service.

So yeah, TiVo does have reason to compete. Lots of them.

Re:Tivo

[petepac]

The major player in PVR land is DirectTV followed by EchoStar. These satellite providers bundle the PVR function into their receivers if you want. Makes great sense since there's a kluge with an IR Blaster you need to do with Tivo and ReplayTV to control the other box. Also cable companies like Comca$t have an "OnDemand" service with their digital cable service that also does PVR functions like Tivo.

Tivo really needs to compete since PVR functionality is being wrapped up in other services like satellite and digital cable. Why pay extra for Tivo when your media provider can just roll it up for you. They become another grease spot on the "Al Gore Memorial Information Super Highway".

Well, it's not like they've been busy...

[dschuetz]

I've got 5 Rio products -- 4 Rio Receivers and one Rio Riot. I love 'em all. They've still got the best features I've seen (the Riot's interface is still far beyond that of the iPod or any other HD portable I've seen). And the Receivers are finally selling at what I think is the ideal price point ($75-100, on eBay).

Unfortunately, SonicBlue never really supported any of these products. They bought a fantastic HD-based car MP3 player (empeg), and promptly killed it off -- even as major manufacturers were starting to integrate MP3 playback into cd players (and now, finally, cd-changers).

They started selling the Rio Receiver, but at too high a price point, and they never updated the software. And now, there are at least three other commercial MP3 receivers from "big companies" (onkyo, phillips, and motorola), but all of 'em are (get this) even MORE expensive than the Rio Reciever was. SonicBlue could have undercut the competition, released some software upgrades (there's a great open source movement on that front that they could have tapped into), and kicked major ass.

All in all, it's been a disappointing ride for customers like me. I'm really glad that the Receiver is so open (people have re-written just about every part of it except the HomePNA kernel module). At this point, I think the best thing that could happen would be for the original empeg/receiver engineers to buy the car and home receivers back and open-source the hardware. Get a flourescent screen, better CPU (for high-rate Ogg decoding), and even cooler open-source client/server software.

But probably some other company will buy the rights and bury them. :(

Re:Tivo

[diabloii]

Comcast On Demand doesn't do any recording at all. It functions more like a PVR that can only play, pause, rewind, and fast forward. So, I don't currently see any competition from Digital Cable providers at the moment. Your point is valid about DirectTV and EchoStar though.

Re:I wish...

[Jaegar]

I wouldn't let this affect your descision too much. The Replay is still a quality piece of hardware that doesn't mess around with all the "user-friendly" features of a Tivo. Maybe I'm just of the mindset that if I want to record something, I will. I would rather not have the Tivo make an educated guess at my tastes.

There's a few companies that are looking into purchasing Replay, one being D&M. All my experiences with them has been fine, and SonicBlue's customer support has always been a black spot on the Replays. The only problem the new owner may run into is the pending lawsuits over Commercial Advance (an awesome feature when it's working), but even if that ability has to be disabled, there's still a 30 second skip button on all the recent models.

So, to make a long post, even longer. If I were you I'd take a hard look at both systems and figure out exactly what out of a PVR. Replay users are not going to lose service, and we tend to be a fanatical bunch. I have three myself.

Re:TiVo

[sylvester]

TiVo's now just as recognizable as "Xeroxing" a document

Yeah, right. 'cause my parents have heard of a TiVo.

TiVo is absolutely nowhere *near* as recognizable as Xerox, which is probably still even less recognizable than Kleenex.

Maybe, concievably, amongst 18-25 yo middle & upper class males you have 50% recognition of that term. Amongst the same group I bet you have 80% for Xerox and 90% for Kleenex.

Admittedly I pulled those numbers out of the air, but you've got a twisted sense of reality if you think TiVo is as recognizable of a brand as Xerox and Kleenex.

-Rob

Don't forget GoVideo

[aredubya74]

With the pending bankruptcy, this product might have been vaporware used to stoke investor interest. But man, do I wanna buy one:

GoVideo® D2730 Networked DVD - World's First Networked DVD Player!

"The GoVideo Networked DVD Player is a high end, slim-line Progressive Scan DVD player, and is the first player of its kind to be able to stream video files through a wireless network to a consumer electronics component. The Networked DVD Player works with either a wired PCMCIA Ethernet Adapter (included) or an optional PCMCIA 802.11b Wireless Network Card. The D2730 can also stream MP3 and WMA audio files and JPEG image files, as well as MPEG1 and MPEG2 video files."

Yes, I can roll my own (even stylishly, with a Shuttle XPC. Yes, I can do so with a cool Linux distro (can't remember the couple I've examined off the top of my head - anyone? Bueller?). But I sure as hell can't do it for $250, which was the SRP for this unit.

Yet, somehow....

[David_Bloom]

Yet, somehow, they managed to get RedHerring's "Top 100 Companies Most Likely to Change the World" award (see left column on that link).

They're just changing the world differently now, by their absense.

SonicBlue invented many nifty products, including, obviously, the MP3 player (invented under its former name, Diamond), the audio set top box (they made the chipset in DELL's box), and many other innovations. They'll be missed.

Don't move to Oregon, we lost another employer.

[Baloo Ursidae]

Oregon is full. Demonstrating this: SONICblue, based out of the Portland-metro area city of Tigard, was a sizable employer here. If you're in Oregon and not born there, I'll take this opportunity to remind you that it's generally polite to leave when you're finished visiting out-of-state.

Re:TiVo

[Erasmus Darwin]

"With Sonic Blue down, TIVO is next in the sights."

I have to disagree. There's a fairly clear delination between the features that got Sonic Blue in trouble (automatic commercial skip; sharing shows with people over the internet) and the features that TiVo supports. Furthermore, TiVo's been fairly careful about both partnering with networks (through such features as the TiVo Showcase, which allows networks to advertise specific special shows) and limiting the ability of people to pull TV recordings off the device (as it's enough of a hassle that you're probably better off just using a separate TV capture card in your PC).

The most important thing is that what the TiVo does is generally no different (or even less powerful) than that of a VCR -- at least from the perspective of avoiding advertising and sharing shows. A VCR lets you timeshift programs and then fast-forward through the advertisements. Ditto for a TiVo. In contrast, ReplayTV let you make the commercials automatically disappear. A VCR lets you record a program and then pass that single copy on to friends. A TiVo doesn't even let you do that, though you can view that copy from anywhere in the house. In contrast, ReplayTV let you send out up to ~15(?) separate copies of the show while retaining the original.

So overall, I think you fears are unfounded. TiVo just doesn't have the risky exposure that Sonic Blue had with the Replay units. Even the suit against Sonic Blue was on shaky legal ground, so TiVo should be sitting high and dry.

(As a minor aside, I'd like to clarify my comparison between TiVo and a VCR above. Generally, when people refer to TiVo as a better version of a VCR, I have to correct them. TiVo is better than having a VCR, a couple dozen scrap tapes, a copy of TV Guide, and a trained monkey who knows how to change the tapes and record shows. It blows the entire VCR paradigm out of the water. However, with respect to the issues at hand -- avoiding commercials in television shows supported by advertising and the sharing shows with friends -- the VCR analogy is still fairly applicable.)

ReplayTV not worthless

[mik]

It is highly likely (IMHO) that Replay will end up being purchased by D&M or a competitor - after all, there is both a significant installed base of users and a non-trivial revenue stream from subscriptions in addition to the IP of the DVR hardware. Heck, maybe even TIVO will bid.

IANAL, but I would think that any purchaser of the replay business unit would be responsible for honoring existing service contracts, including those lifetime subscriptions. If the contracts are breached by replay (e.g. by the buyer or even by replay simply folding), then the owners of the abandoned subscriptions would be due damages and/or part of the auction proceeds.

If the service is abandoned for any reason, it is pretty clear that the replay hacker community will no longer need to restrain themselves - people have been *very* supportive of replay and have tended to come down pretty hard on anyone looking to steal services. If we owners are abandoned, we'll be moving into reverse engineering mode bigtime!

Re:What went wrong?

[spanky1]

The hackability of TiVo is certainly awesome, but I doubt that even 5% of TiVo users hack their system. The price between the two systems has always been comparable, so I doubt that was it either. It probably boils down to marketing and the legal battles.

I'm glad TiVo is playing it safe and not implementing features that piss off the networks (automatic commercial skip, sharing of recorded shows, etc). The ReplayTV had some great features that TiVo lacked, but it got the networks on their bad side.

In any case, I can already rip shows off of my TiVo and burn them easily to VCD or SVCD. The only real problem is my TiVo is WiFi-enabled so a 1 hour show takes like 3 hours to transfer. 100mbit would be better but I haven't run Cat5 all over the place.

Re:I wish...

[deanj]

I've had a ReplayTV since the very beginning, and I love it. When news of this bankruptcy hit, I bought a TiVo that same day.

Unfortunately, the D&M deal fell through. It may be that D&M picks up the assets at auction later this month, but until the auction happens things are still up in the air. Until then, we just have the word of ReplayTV that the guides will last until the end of this month. After that, it's completely up in the air.

That is, if we just stick with their service. I haven't done a single bit of hacking on my Replay, but I would imagine we'd be able to get some code written to get SOME sort of guide working.... does anyone have any idea if a project like that is underway?

BTW, the 30 second skip feature has been there since the beginning. Love that feature. :-)

Regarding TiVO, a couple of things:

The TiVo only records on educated guesses using unused space on the device.

It has USB ports for ethernet (and other stuff, I would guess..haven't looked into that too much) so program guides can be set through the net. This was a great thing for me, because I have one of the original ReplayTVs and didn't have an mods for Ethernet.

The new 4.0 software upgrade will support wireless USB ethernet devices. The (cough) $99 HomeMedia option will allow streaming MP3s and pictures to be sent from your PC, and will allow sharing of programs between multiple TiVos in the house. The first upgrade costs $99, the upgrades for additional TiVos are $49 each.

Anyway to the original poster, bottom line, if you can wait, just wait until this Replay thing sorts itself out. It'll only be a couple of more weeks. If ReplayTV survives, find a friend with one and check it out. Find a friend with a TiVo and check that out too.

But whatever happens, get a PVR. These things are freakin' awesome.

Re:What went wrong?

[deanj]

I've owned one from the beginning, and lived through the SonicBlue buyout of the original ReplayTV company. Their biggest problem was that they didn't go for a subscription for these things from the beginning. The "lifetime" subscription was built into the cost of the unit. This made the price point much higher than TiVo, and given the choice between the initial cost of a ReplayTV and a TiVo, people picked the TiVO. Nevermind that a lifetime subscription buyout for TiVo made it the same price as a ReplayTV... People didn't look at it that way.

After they fixed that, the biggest problem was that they never got "mind share" (did I really use that phrase....shoot me now!) for the product the way TiVo did. Tell anyone about a ReplayTV, and they're more than likely to say "Oh, like a TiVo".
I don't think I've ever seen a ReplayTV commercial in all the time I've owned one.

They had been trying to OEM these things to other companies that do set-top boxes, but I think in the end, the companies decided to do it for themselves, rather than partner with SonicBlue.

It's a great device....and fun while it lasted.

Greg Ballard Strikes Again

[szquirrel]

Hey, what do you know. The same guy who piloted 3dfx down the toilet was at the helm when SonicBlue went tits up.

Look, I understand that CEO is not an easy job, but how much accountability is this guy held to when investors are left holding the bag of his failures?

Re:Tivo

[Zathrus]

The major player in PVR land is DirectTV followed by EchoStar

Actually you have it backwards. Echostar has far, far more 500-series receivers out there than there are DirecTiVo's.

Makes great sense since there's a kluge with an IR Blaster you need to do with Tivo

Not quite true. TiVo's have a serial port on them that can control DirecTV receivers (and some cable boxes - notably the Motorola DCT-2000 series) if the receiver has a "low speed data port".

Oh... and did you note the "DirecTiVo" bit above? Yup - the PVR capabilites for DirecTV are licensed from TiVo. At one point it the boxes were still controlled by TiVo, but it's flip flopped - all service and billing is now done directly through DirecTV and DTV pays TiVo a licensing fee for the hardware and software.

Interesting...

[BigJimSlade]

CostCo just started carrying the ReplayTV a couple weeks ago, which requires a subscription to its service. Wonder how many shoppers are going to get screwed by this one?

Anti-TiVo FUD

[Foosinho]

In interests of full disclosure, I own a DirecTV PVR (formerly called DirecTiVo).

The anti-suggestions bit is pure FUD. It's a zero-impact feature when on (ie, it _NEVER_ uses tuner or space that would otherwise be used by a program you specifically requested), and it can be turned off. I leave it on expressly because it's zero-impact, even tho I rarely watch suggested programs. Every once in a while I don't want to watch anything in the recorded list, and I'll find a gem in the suggestions (a movie I hadn't seen, or a syndicated rerun of Simpsons).

That said, I _love_ my TiVo. I considered a Replay, but the TiVo was a better choice for me, since I was also getting DirecTV at the same time. I like the Replay procuct, especially all the networking capabilities. It's a shame the company is struggling.

Re:A good reason to buy Linux based appliances

[Psykechan]

Although the TiVo units are built around a PPC Linux kernel, it is not an open system. Everything that runs on top of the kernel (myworld, etc.) is not GPL and definitely not open.

I like to compare TiVo to the Apple Macintosh. Both are closed systems with a very large user dev/hack community. The fact that they have an underlying open source base doesn't change anything.

Mindset

[tgibbs]

Maybe I'm just of the mindset that if I want to record something, I will. I would rather not have the Tivo make an educated guess at my tastes.

I'm of the mindset that likes to have a choice. So if I want my TiVo to do this, I'll turn the feature on. If I don't want it to do it, I'll switch it off.

Re:Mindset

[MarkGriz]

I agree. I've only had mine for a week and it's already recorded a few interesting things that I probably never would have seen otherwise.

I've been careful to "thumbs up" on some manly programs, just so my Tivo doesn't think I'm gay ("not that there's anything wrong with that")

Quit bashing TiVo...

[The Lynxpro]

TiVo was smart enough to make themselves synonamous with PVR technology. They were smarter in the subscription based model from the get-go and that caused them to leapfrom ReplayTV. By the time SonicBlue purchased Replay, the game was already up. Did it make me mad that when TiVo launched Series2 they did not bundle it out of the box with USB 2.0, Firewire, or a built-in ethernet port? Yes. But I went ahead and purchased it because I enjoyed my old Series1 and I had a gut feeling Replay would tank. Sure, if you want broadband on a TiVo, you have to buy a USB-to-ethernet dongle (if you are going wired) and you also have to pay $99 for the Home Media Option if you want to stream MP3s or photos, program via the net, or share programs with other TiVo units in your home. Does that bite? Sure, but it is causing TiVo to become profitable and that adds extra to the value of the user experience since the company isn't going under. As a matter of fact, that counts for a whole lot.