ReplayTV ditches advertising play

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ReplayTV is getting out of the advertising business. The personal video recorder company based in Mountain View, Calif., has decided to abandon its charter advertisers program. The company will restructure management and lay off employees as a result of the changes that will reposition the company on a technoloy licensing model. Kim LeMasters, the current chairman-CEO, is resigning, and Anthony Wood, the founder of ReplayTV, is coming back to assume that position. The company will focus its corporate strategy on broadly licensing its proprietary technologies, allowing set-top box manufacturers and network operators to offer digital video recording, video on demand, targeted advertising, program guide services and electronic commerce. "We are going back to a traditional Silicon Valley model as a supplier of software," said Steve Shannon, VP-marketing.PVRs are set-top boxes that allow consumers to digitally record and store their favorite TV shows for viewing later. They are also widely known for their ability to skip over, or zap out, ads. ReplayTV was putting together a partnership with the marketing industry in which advertisers would be able to add new commercials to recorded programming. TiVo, another leading PVR, is also embarking on a charter advertisers program. ReplayTV recently announced that Universal Pictures and Coca-Cola Co. had signed on to become its first advertisers. Coca-Cola's two-year-plus deal gives it title sponsorship of editorial on Replay Zones (programming categories that allow consumers to identify different genres to record), banner ads and other promotional vehicles. ReplayTV executives were hoping that the Coca-Cola deal would spur other marketers to line up. Mr. Shannon said ReplayTV would try to develop a new relationship with Coca-Cola.A venture capital partner at ReplayTV, according to an executive close to the company, pulled the plug on the program because it was moving too slowly and will not realize results or profits any time soon. TiVo's backers include CBS Corp., NBC and Walt Disney Co., while ReplayTV is backed by Grey Global Group, Interpublic Group of Cos. and Omnicom Group.

Copyright November 2000, Crain Communications Inc.

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