Sonic Blue Chpt. 11 and Sale of Assets - Page 4 - AVS Forum
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post #91 of 265 Old 03-21-2003, 05:07 PM
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FWIW, From the SONICblue web site....

Quote:
Dear Customers,

ReplayTV values your business. We are committed to seamlessly transitioning the ReplayTV Service to the product line’s new owners. Everyone on the ReplayTV team will be working closely with the new owners to ensure that our customers continue to receive the award-winning ReplayTV Service without interruption.

We are optimistic about our future and appreciate your support through this transition.

Thank you,
The ReplayTV Team
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post #92 of 265 Old 03-21-2003, 05:29 PM
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Well if all else fails, I can reformat the Hard drives and use them with my PC.

Ken Elliott
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post #93 of 265 Old 03-21-2003, 05:56 PM
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Quote:
Originally posted by JimWCB
Ah, but they aren't buying "SonicBlue". They're buying the "ReplayTV" unit.

Of course, that unit is responsible for providing guide data and firmware updates for Showstopper/ReplayTV units in the field.

Legally they could negotiate the purchase to separate the technology from the ongoing support of current ReplayTV users, but that would be shooting themselves in the foot. IMHO.
I agree completely. What moron would spend millions for the replaytv unit, and then sabatoge the business by screwing over their whole customer base unless they had an ulterior motive.

I could see this happening if they had a competing product on the market and wanted to get the competition out of the way. Gemstar, the maker of guide-plus did this very thing at the end of 1996 when it bought out Videoguide in Dec 1996 for 8.5 million dollars.

Gemstar had said they were going to improve the videoguide menu service, but as soon as the sale was completed, they started reorganizing and laying off videoguide employees. One day the first week of September, without warning, the Videoguide menu was suddenly blank and that was it.

I don't suppose anyone knows whether these buyers have a stake in Tivo or some other company with competing software.
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post #94 of 265 Old 03-21-2003, 06:03 PM
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Quote:
Originally posted by JJON2121
<SNIP>

I don't suppose anyone knows whether these buyers have a stake in Tivo or some other company with competing software.
Philips (largest purveyor of TiVo hardware) owns a portion of D&M.
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post #95 of 265 Old 03-21-2003, 06:05 PM
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Quote:
Originally posted by JJON2121

I don't suppose anyone knows whether these buyers have a stake in Tivo or some other company with competing software.
Your an X-Files fan right ? The Truth is out there.

Just having some fun dude :p




Microsoft been known to do this kind of stuff with competing products in its younger days. To many eyes on them now to pull it off.

WeÂre doomed. It will never work
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post #96 of 265 Old 03-21-2003, 06:05 PM
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Quote:
Originally posted by JJON2121
I don't suppose anyone knows whether these buyers have a stake in Tivo or some other company with competing software.
Philips owns a part of D&M and markets TiVo products under it's own name. The Philips DSR7000 a DirecTV Receiver Powered by TiVo has been announced and should be available soon. I don't think Philips owns part of TiVo but several different Philips TiVo models have been sold.

Chris
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post #97 of 265 Old 03-21-2003, 06:49 PM
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Quote:
Originally posted by JJON2121
I agree completely. What moron would spend millions for the replaytv unit, and then sabatoge the business by screwing over their whole customer base unless they had an ulterior motive.
Well, very simply, maybe they want an engineering team, IP, or just a brand name. Their release was clear that they were not purchasing RePlayTv and Rio, but their assets. It is not clear that it is in their interests to provide guide service for these boxes. It is very likely that they will (or require SONICBlue to) move to settle these lawsuits very quickly. That probably means that CA and Internet Show Sharing both go away. That might also mean that like TiVo, they only transfer video in an encrypted form that might make DVarchive no longer work.

Providing service to all RePlayTv's dialup customers is very costly. I will be very curious to see that they do, but I would not be at all surprised to see them force everyone to begin paying a monthly fee, or stoping this guide service altogether. RePlayTv's installed base is very small. If no current customer ever bought from them again, but they were able to get some percentage of their current Dennon and Marantz customers to buy a DVR with those brand names, they might be fine with that.

I think it is very naive to think that because they are buying these assets, everything will be great for current customers.

/carmi
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post #98 of 265 Old 03-21-2003, 06:52 PM
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Quote:
Originally posted by sixt7gt350
Philips (largest purveyor of TiVo hardware) owns a portion of D&M.
Sorry, Philips has not had a TiVo product available for almost a year. They have announced a new DirecTiVo receiver to be available fall, but they are not (nor have they ever been) the "largest purveyor of TiVo hardware".

/carmi
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post #99 of 265 Old 03-21-2003, 06:54 PM
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majortom
Mr doom and gloom is back.

btw: I and many others got both rebates check back. You said that would not happen

WeÂre doomed. It will never work
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post #100 of 265 Old 03-21-2003, 07:04 PM
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Quote:
Originally posted by jones07
majortom
Mr doom and gloom is back.

btw: I and many others got both rebates check back. You said that would not happen
Actually, I think Mr. Reality Check is more accurate. In all my posts, I never said that you would not get your rebate checks, just that if SONICblue filed for protection under Chapter 11 of the Bankruptcy Code, they would not have to pay rebates. Given that they just filed, now will be the time to see if they still pay those rebates.

I am glad you got your rebates. I hope your box continues to work as you expect it.

/carmi
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post #101 of 265 Old 03-21-2003, 07:08 PM
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well thank you majortom

I do believe that's one of the few positive things you ever said here in the replay forum :)

WeÂre doomed. It will never work
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post #102 of 265 Old 03-21-2003, 10:18 PM
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Quote:
Originally posted by BaysideBas
Barring an actual discharge of obligations from a bankruptcy court, contractual obligations of the company being bought are assumed by the buyer. Chapter 11 does not automatically wipe the slate clean.

And remind me to not ever get into any contracts with you :D
Not true. The obligations of the purchased only transfer if the terms of sale include them. And any company worth anything provides a standard disclaimer along the lines of " these terms may be modified or discontinued at any time".

When Gibson Guitars acquired Baldwin Pianos all warranties issued by Baldwin were null and void and exceptions are considered on a case by case basis. There are many, many similar cases if you look.
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post #103 of 265 Old 03-21-2003, 10:29 PM
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Yeah, I don't see how a new buyer (nee Denon) could possibly make the numbers work out if they have to service the dialup machines with lifetime service for free...

I would expect, in the best case scenario, for them to offer service to the dialup customers on a pro-rated basis, depending on when the unit was first activated. (Those activated most recently pay the least, or get the most months of future service for free, if they drop the lifetime service model). The ethernetted machines are a no brainer, since servicing them costs very little. But paying to have a nation of local dialup numbers is VERY costly.

The BIG wildcard will be the Panasonic (PANASONIC) Showstoppers. If Denon continues to provide service, then regardless of how they change the terms of that service for Replay owners, I would expect that Panasonic will have to shell out some amount of money to Denon to keep the service free for lifetime for the Showstopper owners. Either that, or Panasonic will have to shell out some not-insignificant amount of money to each Showstopper owner. Lucky for Showstopper owners, the company that put their name on their recorders is still in business and viable, and can't hide behind Chapter 11!

Actually, if I were Denon, the first thing I'd look into is how difficult it would be to modify the pre 4xxx series Replay/Showstoppers to implement ethernet ability...If it could be done reasonably cheaply, they could offer to do the upgrade for a modest amount of money and then get those units off the dialup network. There could be a phaseout period after which those without the upgrade would be SOL, but those who had the upgrade done would continue to get "lifetime" service. Unfortunately, it is not clear to me that the upgrade could be done easily and cheaply except on the early units that had an unused firewire port (that could be activated with a new OS or firmware, I assume).


Quad
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post #104 of 265 Old 03-21-2003, 10:33 PM
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I've posted some comments here:

http://replayfaq.leavensfamily.com/D..._Display?ID=25

Remember, it's just television...
Planet Replay: http://www.planetreplay.com
Do you VUDU? http://www.planetvudu.com
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post #105 of 265 Old 03-21-2003, 11:33 PM
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Quote:
Originally posted by QuadGuy
The ethernetted machines are a no brainer, since servicing them costs very little. But paying to have a nation of local dialup numbers is VERY costly.
The nationwide dialup is piggybacked on Earthlink which I imagine is
far less costly than maintaining private modem banks.
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post #106 of 265 Old 03-21-2003, 11:35 PM
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Quote:
Originally posted by majortom
Actually, I think Mr. Reality Check is more accurate. In all my posts, I never said that you would not get your rebate checks, just that if SONICblue filed for protection under Chapter 11 of the Bankruptcy Code, they would not have to pay rebates. Given that they just filed, now will be the time to see if they still pay those rebates.
ReplayLyndon stated that rebates will continue to be processed:

http://www.planetreplay.com/phpBB2/v...=2871&start=15
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post #107 of 265 Old 03-22-2003, 03:23 AM
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Quote:
Originally posted by sfhub
The nationwide dialup is piggybacked on Earthlink which I imagine is
far less costly than maintaining private modem banks.
Since, as you point out, dial-up not handled directly by Replay, but by Earthlink, the costs involved in keeping the dial-up system are likely quite low.

Older Replay's and Showstopper only access Earthlink's network in the middle of the night, almost certainly the time when Earthlink's network is at it's lowest loading and when there are plenty of available dial-in lines. And if one considers an ISP's empty "middle of the night" dial-up lines a perishable product (like airline seats), the cost to Earthlink is actually nothing at all.

Consider that Earthlink needs these telephone lines anyway, they're just allowing Replay to use them in off-peak hours when they would otherwise be unused. Earthlink shouldn't charge Replay very much for this service as it really is "free money" for Earthlink. There's absolutely no downside for Earthlink in this deal, there are no support costs and it doesn't cannibalize their other business.

If the new owners were to find Earthlink is charging too much, certainly a similar deal could be negotiated with any of the other national ISP's. As long as the services overlapped for a month or two, the migration would be mostly seamless.

As for the server costs, the Replay servers aren't really transmitting all that much data. They could be the same servers that are serving the Ethernet based machines.

Bottom line, I just don't see dial-up as a large financial burden to any new owners, especially if Panasonic is willing to kick in a few dollars to keep things running and keep us Showstopper users from making their life miserable ;).
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post #108 of 265 Old 03-22-2003, 04:25 AM
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Quote:
Originally posted by sfhub
ReplayLyndon stated that rebates will continue to be processed:

http://www.planetreplay.com/phpBB2/v...=2871&start=15
Unless ReplayLyndon is also a Bankruptcy Judge, head of the Creditor's Committee or personally plans to pay those claims, his statement means little. Once they have filed for protection under Chapter 11, SONICblue no longer gets to decide how their money gets spent. They need to get approval for any money spent. It is possible that they will try to pay rebates, but it is equally likely that they will not be allowed to do that. Only time will tell. As others have said, decide if you are willing to keep your 4500 without getting a rebate. If you are and you actually get it, you have won, if you do not get it, you were not expecting it so you should not be upset.

As I said it is possible that they will pay some or all rebates, but it is also possible that no new ones get paid.

/carmi
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post #109 of 265 Old 03-22-2003, 05:26 AM
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Quote:
Originally posted by QuadGuy
Yeah, I don't see how a new buyer (nee Denon) could possibly make the numbers work out if they have to service the dialup machines with lifetime service for free...

It is a certainty that D&M will not provide the dial-up lifetime service for free. If all the assets acquired are worth $100,000,000 and all of the liabilities assumed are valued at $60,000,000, the purchase price should be $40,000,000. The future cost to provide the lifetime service can be determined and a net present value assigned to that cost. The problem to overcome for us lifetime subscribers is will the secured lenders permit assets to be used to provide service? I am sure the secured lenders look at lifetime subscribers as unsecured lenders. The argument that has to be made is that if lifetime subscribers are disenfranchised the company brand is crippled and ReplayTV no longer has any viability as an ongoing concern and the company is therefore not worth purchasing.

I think ReplayTV can not survive without lifetime agreements honored. After all, these machines have a limited product life and all will die or become so obsolete within a number of years that none will remain in service. The new company can sell replacement products to those loyal customers. It is also possible that an agreement will meet court approval that service will be provided for lifetime subscribers for a finite period, say 5 years. The cost to provide this service can be easily estimated and deducted from the value of assets acquired.

I don't have any idea what will actually happen but the probability in my opinion is that something good can happen and ReplayTV can continue on.

Chris
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post #110 of 265 Old 03-22-2003, 05:35 AM
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Quote:
Originally posted by majortom

As I said it is possible that they will pay some or all rebates, but it is also possible that no new ones get paid.

/carmi
The probable outcomes are all rebates unpaid after the bankruptcy filing will be paid or no rebates unpaid after the bankruptcy filing will be paid. Preferential or arbitrary treatment paying some and not others will not be permitted by the bankruptcy court. It is my opinion that the rebates will be honored. The ReplayTV brand value is dependent upon consumer goodwill. Bankruptcy courts and secured lenders recognize these important concepts. If ReplayTV doesn't honor the lifetime subscriptions and rebates, you might as well bury the brand, it won't be worth attempting to continue operations in my opinion.

Chris
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post #111 of 265 Old 03-22-2003, 06:30 AM
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Quote:
Originally posted by majortom
Sorry, Philips has not had a TiVo product available for almost a year. They have announced a new DirecTiVo receiver to be available fall, but they are not (nor have they ever been) the "largest purveyor of TiVo hardware".

/carmi
So which hardware brand name has the bulk of the TiVo market, standalone and satellite inclusive?
The "bragnatures" at the bottom of posts on the TiVo forum tell me that Philips leads, followed by Sony. While it may be true that don't have anything currently on the market, it appears to me that it will take some time for their "market share" to be surpassed.
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post #112 of 265 Old 03-22-2003, 06:54 AM
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Quote:
Originally posted by Chris Gerhard
The probable outcomes are all rebates unpaid after the bankruptcy filing will be paid or no rebates unpaid after the bankruptcy filing will be paid. Preferential or arbitrary treatment paying some and not others will not be permitted by the bankruptcy court.
While I agree that it is likely an all or none proposition, those units bought after their filing could be treated differently (probably to their benefit) just like Debtor in possession financing.

Quote:
It is my opinion that the rebates will be honored. The ReplayTV brand value is dependent upon consumer goodwill. Bankruptcy courts and secured lenders recognize these important concepts. If ReplayTV doesn't honor the lifetime subscriptions and rebates, you might as well bury the brand, it won't be worth attempting to continue operations in my opinion.

Chris
You are assuming that D&M, Inc. is buying RePlayTv to get their brand. I think that is a naive assumption. You are also assuming that their current customers are very important to that brand. It is possible that they are just buying an engineering team and a product line and that they plan to introduce a DVR with either a Denon and/or Marantz label. In that case, they will may not care about current RePlayTv customers at all. It maybe that the feel that RePlayTv's current brand is tarnished and they want to disassociate themselves from it.

Even if they plan to use RePlayTv as a brand, they may be counting on the general public's knowledge of it rather than the small number of current customers and again may decide that they do not care about angering them. They might be planning a service fee free unit like RCA's box and therefore would not want to be saddled with costs of maintaining RePlayTv service.

There are so many possibilities that until they (D&M, Inc.) actually take possession of these assets and announce their plans, we have no way of knowing what they will do.

For those people that are outside their 30-day return window, it does not matter, you just have to wait and see. For those that are still trying to decide, one must consider if one wants this product just as a manual hard disk based VCR with no rebate (worst case scenario). If that is OK, then no problem, keep the unit and if things go well great, you won. If that is not OK, then at this point returning it makes sense.

Again, I have no idea what D&M, Inc., may be planning, but I would not want to bet $100 or more that everything will just work out for me.

/carmi
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post #113 of 265 Old 03-22-2003, 07:12 AM
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Quote:
Originally posted by sixt7gt350
So which hardware brand name has the bulk of the TiVo market, standalone and satellite inclusive?
The "bragnatures" at the bottom of posts on the TiVo forum tell me that Philips leads, followed by Sony. While it may be true that don't have anything currently on the market, it appears to me that it will take some time for their "market share" to be surpassed.
Given that TiVo has almost doubled its subscriber base since Philips exited the market, it is unlikely that Philips is number one. Even assuming that they were two thirds of all boxes sold during that period (from what I have heard, the mix was much closer), they would not be number one any more. Until last quarter, Sony and TiVo were splitting the market (Sony in both integrated and stand alone boxes and TiVo in stand alone only), last quarter it was a 3-way split with Hughes. I would bet that Sony or Hughes was number one and Philips was two or three.

/carmi
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post #114 of 265 Old 03-22-2003, 07:32 AM
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God. I'm almost finding myself agreeing with "some"of majortom
post. There is a first time for everything I guess. D&M is a Japanese company they
may just want to bury the brand and use the ReplayTV software on their own stuff. And don't care about replay old customers Then again maybe they will . Maybe they see 100K to 250K customer base as a good business deal that they pick up at a fire sell. Who knows Not majortom and not I. the only people that know for sure are in Japan. And I think it will be weeks if not months before this all falls into place. Everything else is just forum posters pulling uninformed guesses out of their A$$.

EDIT: Forget to say what part I agree with majortom. I own 3 ReplayTV dvr's all 3 way past the 30 day window of returning. So I'm riding this to the end and hoping for better days as D&M becomes the new owner. Now for you very new replay owners who are inside that 30 day window. You have something to think about. If you have the kind of personality that will lose sleep over this. Maybe you should return. If it was me I would just hold on for a few weeks and pay monthly until the dust settles

WeÂre doomed. It will never work
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post #115 of 265 Old 03-22-2003, 07:47 AM
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Quote:
Originally posted by Ico-Jones
I have to imagine that the cost of providing the program guide is relatively minimal, especially with the preponderance of broadband connections.
Given that only series 4000 and new boxes have broadband most RePlayTv customers have dial up.

Quote:
Put yourself in Denon's shoes -- can that cost possibley be anywhere close to the cost of alienating the core user group of what is (unfortunately) a niche product? If they buy Replay, they will continue the service. Buying the company makes no sense (to me at least) if you don't honor the lifetime subs.
Figure that each box spends on average 5 minutes a day on a call (remember only 4000 series and above have broadband). Unless they have their own POP network, they will have to pay someone for that. Even at 2 cents a minute (low for renting POPs), it ends up at around $3 a month just for the cost of the calls. Even at 50,000 users, that is $150,000 a month or $1.8 million a year. Not a trivial cost.

As I mentioned before, they may have had many reasons to buy these assets and it is quite possible that they will not care at all about current customers.

Quote:
My knowledge of the general rules of accounting leads me to believe that much of the revenue associated with the lifetime subs is not likely to have been booked by SonicBlue (the revenue needs to be amortized over the likely lifetime of the obligation to provide the service). Thus, part of what Denon is buying is a stream of accounting revenues that will help them boost their top line.
Actually, from what I understand from talking to their investor relations people, the way SONICBlue has accounted for this revenue allowed them to book it right away, so there no stream of revenue there.
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post #116 of 265 Old 03-22-2003, 08:16 AM
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I think D&M's major market is this country. It is not at all likely that D&M will buy ReplayTV, abandon the ReplayTV customers in this country, and use technology purchased to develop products for other markets. The ReplayTV patents and technology can't be worth that much. If D&M wants to be in the PVR market, I think the company wants to be in that market in this country and this purchase is a quick way to enter the market. After all several companies are in the PVR market without relying on ReplayTV patents or engineers. It would have been much less expensive just to pay a fee to license the technology for other markets then to purchase the company and end the business in this country just to use the technology in other countries. I am not naive at all and realize nothing is certain at this time but the pieces have to add up to something that makes sense.

Chris
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post #117 of 265 Old 03-22-2003, 08:21 AM
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I am not sure why everyone is thinking that ReplayTV will just want to drop their loyal customers. When I called them, they said "No matter what happens, they are going to continue to provide the lifetime support and the 9.99/month service." If you don't believe me, call them yourselves.
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post #118 of 265 Old 03-22-2003, 08:34 AM
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Originally posted by Chris Gerhard
It would have been much less expensive just to pay a fee to license the technology for other markets then to purchase the company and end the business in this country just to use the technology in other countries. I am not naive at all and realize nothing is certain at this time but the pieces have to add up to something that makes sense.

Chris
Who would you pay this fee to? For $40 million they get RePlayTv and Rio. They may value that at $20 million each or any other mix that they wish. They might even feel that Rio is worth $40 million on its own and they are getting RePlayTv for free.

I expect that they will release a DVR in this market. I am just much less convinced that it will be branded RePlayTv and that they will continue to offer service for free to existing RePlayTv customers. This is a very fast way to build an engineering team. As you may or may not know, Palm, Inc. did exactly this when they bought Be, Inc. for $25 million just to get their engineering team (they totally abandoned Be's existing products). I think it is just as likely that they will not care about RePlay's installed base as it is that they will. At 50/50 buying a new system seems much less attractive.

While you are existing owner and so have no choice, I think it is irresponsible to say "keep your unit and everything will be fine."

It is possible that everything will be better in this new environment, but it is certainly not guaranteed.

/carmi
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post #119 of 265 Old 03-22-2003, 09:12 AM
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Originally posted by jones07
Now for you very new replay owners who are inside that 30 day window. You have something to think about. If you have the kind of personality that will lose sleep over this. Maybe you should return. If it was me I would just hold on for a few weeks and pay monthly until the dust settles
Are you kiddin'? This is a great time to buy a ReplayTV. I just did and activated the service two days ago. These 4532's are being offered at a great price. I've got absolutely no regrets and am glad that there are great products available at bargain prices.

Look at it this way: I paid $150 for a closeout 30hr. TiVo HDR312 which I use unsubbed with nagscreens. That comes out to $5. per basic quality storage hour or $15 per high quality hour.

I paid $750 for ReplayTV's 4532 which currently is full featured, but, worst case scenario, can be used without an EPG with no nagscreens. That comes out to $2.35 per basic quality storage hour or $7.00 per high quality storage hour.

I don't expect the worst case scenario, but I'm prepared for it. In any case I'm way ahead with ReplayTV!
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post #120 of 265 Old 03-22-2003, 09:38 AM
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Originally posted by majortom
Who would you pay this fee to? For $40 million they get RePlayTv and Rio. They may value that at $20 million each or any other mix that they wish. They might even feel that Rio is worth $40 million on its own and they are getting RePlayTv for free.

If D&M only wanted to license ReplayTV technology for products in other markets, they would pay ReplayTV the fee. Sony has done this with TiVo for products available in Japan. ReplayTV would likely have agreed to a deal to generate cash flow from a market that ReplayTV has no ability to enter on it's own. It could have been structured a number of ways and this sort of thing is done often. I don't know what the purchase price is or how it will be allocated to the assets but I don't think anybody believes Rio is worth $40,000,000.

Chris
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