Channel Master Targets Cord-Cutters With New Over-the-Air DVR

Channel Master launched a DVR for over-the-air programming that’s designed to boost its antenna business while giving rural TV owners a DVR option and cord-cutters another reason to abandon cable or satellite TV service. It’s the company’s third-generation DVR, said President Coty Youtsey, who said it has “learned from the past two iterations some of the idiosyncrasies involved” in working with broadcast and guide data that can make a CE device freeze. “We've got that under control now,” he said, which he said is an advantage Channel Master has over competitive products coming to market. Especially when dealing with over-the-air broadcasts, “It takes several years to get the software to the point where it’s consumer-friendly enough and stable,” he said.

Channel Master’s first DVR product, the CM-7000PAL, had been an EchoStar product under the Dish brand, which sold at Walmart and Fry’s Electronics through a rebranding agreement in limited supply. When the chipsets were discontinued, that ended the run. The second-generation product, the CM-7400 ($400 with a 320-GB hard drive), added Internet integration and a program guide, but it, too, saw its demise when the chips were discontinued. The company hopes to avoid a similar fate with the DVR+ by using the Broadcom 7231, a “very well-known chip” used in gaming consoles, Youtsey said. “We don’t expect it to go anywhere.”

The third-gen DVR+ outsources the hard drive to one of the consumer’s choice. “Instead of making six different products, we decided to make it flexible,” Youtsey said. Customers provide their own hard drives via USB and choose the size that’s right for them. The solution promises to ensure “anyone can watch and record free HD-quality broadcast TV” without a broadband connection. Consumers who do have broadband, though, can access streaming video services.

The slimline DVR+ combines a dual-tuner HD DVR, a Broadcom 7231 SoC, a 3D graphics engine and programming guide software in a $249 box. With customers supplying their own hard drive, it cuts hardware costs and gives consumers the flexibility to pay for the storage capacity they want. “Hard drive technology is always decreasing in value,” Youtsey said. “We don’t want to put a drive today that cost us $100 and a couple of months from now will be $60.” Using a model similar to digital cameras, the box comes with 16 GB NAND flash memory, enough to engage pause and record 2 hours of HD programming, Youtsey said. Channel Master has certified three Seagate hard drives as pairing partners for the DVR but expects it to work with a variety of drives, he said.

On a recent press tour in New York, company executives demoed the DVR along with an indoor $20 antenna made by competitor RCA to show the recorder’s ability to work with antennas consumers currently own. Some 15 million antennas are already in the market, Joe Bingochea, director-product management, told Consumer Electronics Daily. The company would prefer customers to buy a Channel Master antenna, said Youtsey, but the solution gives the huge installed base an option to own a subscription-free over-the-air DVR without having to invest in a new antenna or a subscription-based DVR. Channel Master plans to sell its own $49.99 indoor-outdoor antenna with the DVR. Youtsey said the Channel Master antenna will have a higher range -- 35 miles -- than less expensive antennas, including the RCA model used in the demo, which had a range of 25 miles. The Channel Master antenna also comes with an indoor-outdoor mounting system. The footprint is slightly larger than 8 1/2 by 11 inches, Youtsey said.

Channel Master said its solution offers a better HD signal because over-the-air signals aren’t compressed as cable and satellite signals are. The box offers antenna users an electronic program guide (EPG), Youtsey said. He said cord-cutters are “trying new things” as TV programming alternatives such as Roku boxes and Apple TV, and Channel Master wants to reach those customers. “Those boxes are great,” he said, “but you're not going to get the Super Bowl on it.”

Channel Master designed the box and the EPG internally, and it’s built by a contract manufacturer in India, Youtsey said. Program information is delivered over-the-air from broadcasters with up to two days of programming. Consumers who connect the box to the Internet get up to 14 days of programming. The Internet connection adds logos and a more colorful guide experience, Bingochea said. The DVR uses a metal chassis, which could interfere with Wi-Fi, so the company offers a $39 external Wi-Fi adapter via USB, Youtsey said.

For consumers who use the streaming feature, all the channels will be located at channel 200 on the EPG to simplify navigation, Youtsey said. Currently, only Vudu is supported through the box, but he promised “more to come” and said work is underway with four or five additional content providers. Planned are Internet content from services such as YouTube and an “all-you-can-eat” service such as Netflix, he said. “We don’t want to offer four duplicates” due to cost, he said. “It’s pretty expensive to port it over the app,” Bingochea said of video content services. Vudu is not subscription-based, which fits with the device’s subscription-free nature. Channel Master wants to add a streaming music service to mimic the Music Choice channels on cable, while Vudu is the box’s version of pay-per-view, Youtsey said. “Anything that the cable operators would provide, we want to do the same but in a subscription-free format,” he said.

Despite the connection with Vudu, owned by Walmart, Channel Master isn’t launching the DVR at that retailer, Youtsey said. It wants a “controlled rollout” with this device, he said, so it’s launching through Channel Master’s store. The company is expanding its customer service hours to 7 a.m.-7 p.m. to support customers. It also has a “robust knowledge base” with FAQs, videos and tutorials on its website. “There are a lot of companies that have come to market with antennas and other products and they don’t realize there’s a big support piece that has to be in place to make sure that the consumer is satisfied and has chosen the right product,” said Bingochea.

Youtsey cited Boxee as one such company that didn’t succeed when it launched its DVR at retail. “There was no support,” he said. “There’s nobody at Walmart to help you.” Before it will go into a store like Walmart, Channel Master will have to develop “intuitive story displays” and have the right material, including 24-hour support, Bingochea said. Boxee didn’t have the antenna knowledge required to serve the market, he said.

Channel Master expects to sell through Walmart in a few months, but it wants to establish the support base on its own website first, he said. If a customer buys the product at Walmart and takes it back, “they're just going to throw it in the basket behind the customer service counter and you're done,” he said. “We were the first to patent and sell the TV antenna,” Youtsey said, saying the company has the experience and expertise to support the product. A few months after launching on its own site, Channel Master plans to sell through Amazon, Walmart and existing retail partners Fry’s and Crutchfield, Bingochea said.

In addition to phone support, Channel Master is supporting consumers with an antenna selection tool at antennachoice.com to help consumers pick the right model, also providing the number of channels available with that antenna for a given area, Bingochea said. Channel Master partnered with Broadcast Interactive Media Services, which provided the data for the antenna selector tool. In Manhattan, DVR+ could access 48 over-the-air channels on 26 stations. A location in nearby Brooklyn could pick up 69 channels on 33 stations, with access subject to ZIP code, building materials between the antenna and other variables, said Youtsey.

On whether the company envisions consumer pushback with the user-supplied elements of the DVR offering, Youtsey said the target user base is fairly tech-savvy “because they've done the antenna install.” For the 15 million target customers who are potential cord-cutters, “it will be a little more challenging.” Overall, he said, the approach benefits consumers because it lowers the entry point out of the gate, and not everyone wants the same drive capacity. “If we put a 3 terabyte drive in there, not everybody is going to want to spend $400 for a device,” he said.