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Verizon FiOS Seeks Gold in DVR Wars

Seeking to trump its rival pay-TV providers, Verizon is introducing a new FiOS TV service that allows subscribers to record up to 12 shows at once on their DVR-equipped set-top boxes.

The new service from Verizon Communications Inc. (NYSE: VZ), known as FiOS Quantum TV, also offers the ability to store up to 200 hours of HD programming, with 2 terabytes of storage space. It represents a major upgrade from the current FiOS TV multi-room DVR service, which lets customers record just two shows simultaneously and store up to 50 hours of HD fare.

As a result, FiOS Quantum TV takes the lead in the burgeoning DVR wars among the leading US pay-TV providers. Its ability to record up to 12 programs at once tops the previous high of 10 programs set by New York-area rival Cablevision Systems Corp. (NYSE: CVC) last year when it launched the latest version of its network-based Optimum DVR product. (See Cablevision's Expanding Network DVR.)

But there's a catch. Unlike the DVR services from such competitors as Cablevision (10 shows at once), Dish Network LLC (Nasdaq: DISH) (eight shows at once), DirecTV Group Inc. (NYSE: DTV) (five shows at once), and AT&T Inc. (NYSE: T)'s U-verse (four shows at once), the new Verizon FiOS service depends on more than one master set-top box in the home to reach its maximum potential. So its installation could be more complicated and costly for customers. (See Comcast Cloud DVR Launches in Philly, Chicago Next.)

Specifically, the FiOS Quantum TV service relies on a new video gateway box from Arris Group Inc. (Nasdaq: ARRS). Known as the Verizon Media Server, this gateway comes equipped with six tuners and 1 terabyte of storage. That enables it to record up to six shows simultaneously and store up to 100 hours of HD programming. Attached to one TV, the gateway acts as he main hub for up to five TVs in the home, with the other TVs connected to much smaller set-tops, or media clients.

Thus, to reach the 12-show recording maximum, FiOS TV subscribers must take two video gateways in the home. That will also allow them to connect up to 10 TVs if they wish.

Verizon, which has rolled out FiOS Quantum TV in two markets so far, is pitching the two-gateway, 12-show DVR service as its premium brand. The product costs an additional $20 month for current multi-room DVR subscribers, plus a one-time $25 equipment upgrade fee.

The big telco, which closed out 2013 with 5.3 million FiOS TV subscribers, is also offering the single-gateway, six-show version as its enhanced brand. This product costs an extra $10 month for current multi-room DVR subscribers, plus the one-time $25 equipment upgrade fee.

Verizon is rolling out FiOS Quantum TV first in north Texas and Harrisburg, Penn., where it conducted beta trials of the new service. Plans call for extending the service to other FiOS-TV markets in phases over the next few months.

— Alan Breznick, Cable/Video Practice Leader, Light Reading

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