ReplayTV is eliminating the PVR's abilities to skip commercials automatically and send shows through the Internet, two of its best features, sealing its own doom - good thinking:

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.

....Among PVR developers, Santa Clara, Calif.-based Sonicblue was the most aggressive when it came to offering new features that tested the limits of copyright law. Rival TiVo Inc. of San Jose has taken a more conservative approach, offering fewer commercial-skipping capabilities and restricting the transmission of shows to TiVo boxes in the same home.

Entertainment-industry executives insist they're not trying to stop innovative products. They say they're only trying to protect their programs and preserve their ability to explore new business models made possible by digital technology.
[LA Times]