Now the VCR Can Do What It’s Told : Electronics: A new Canoga Park firm’s product offers voice-activated programming of VCRs. But some predict the $169 price will turn off consumers.
Tonight Show host Jay Leno jokes that when he visits his parents at Christmas he turns on their videocassette recorder for them. When he returns at Easter, they still haven’t touched the thing, so he turns it off.
Many Americans have no idea how to program their VCRs to tape future shows, a human dilemma that surfaces in the routines of countless stand-up comics.
VCR makers have tried to improve matters by offering on-screen menus that give viewers step-by-step instructions on their television sets. Two years ago, another electronic crutch was introduced, VCR Plus. With this $50 gadget, the user simply enters a numerical code and VCR Plus programs the recorder itself.
Now there’s another alternative. A start-up Canoga Park firm has developed a hand-held product that allows you to just tell the VCR to tape a future program. The device also uses voice commands to fast-forward through taped commercials and acts as a universal remote control that works with any TV and VCR.
The firm, with the mouthful of a name, Voice Powered Technology International Inc., two weeks ago also convinced investors to pony up $5 million to help get its product off the ground.
Voice Powered’s chairman, Michael Bissonnette, has no doubt about the potential demand for his product, even though its $169 price costs as much as some VCRs do. “People can’t program their VCRs and people don’t like having multiple remote controls” to operate the TV, VCR and cable box, he said. “People don’t like to watch commercials.”
However, to say his outside investors are speculating with their money is no understatement.
Risk No. 1: Whether Voice Powered can get enough consumers to pay for its product, known formally as the VCR Voice Programmer, to make the company successful.
Risk No. 2: There’s no history on which to base a guess about risk No. 1. Voice Powered, founded by Bissonnette in January, 1990, had no sales until it began marketing the VCR Voice Programmer in July. Also, the device is sold via a toll-free telephone number only--it’s not available in stores.
Not everyone shares Bissonnette’s outlook. At $169, the VCR Voice Programmer is “price-prohibitive” for most consumers, said Bob Becker, audio-video merchandise manager for L.A.Tronics, an Encino-based chain of electronics stores. “That’s just a personal opinion. I would think there’d be interest at $100, but even there, it’s hard to tell with consumers.”
Bissonnette countered: “One hundred and seventy bucks on a credit card is a useful $170,” “Now they can program their VCR, they can get rid of their multiple remote controls, they can zip through commercials and they’ve got something fun.”
Indeed, the public’s general inability to manually program their VCRs is why VCR Plus has been successful. VCR Plus is also a hand-held device, made by Gemstar Development Corp. in Pasadena, that requires users to punch in 3- to 8-digit codes reserved for a particular show into VCR Plus, which then tells the VCR when to record the program. The codes are printed in newspaper TV listings (including The Times) and TV Guide magazine.
Privately held Gemstar launched VCR Plus two years ago and, although it won’t disclose exact sales, says it has sold “millions” of units to date.
Voice Powered estimates that Gemstar sold more than 2 million units--for total sales of about $70 million--in its first year of nationwide availability. Most major VCR manufacturers also are now building VCR Plus into certain of their new models, Gemstar says.
So why would anyone want Voice Powered’s more costly gadget?
Because, Voice Powered asserts, VCR Plus is limited to certain geographic areas, must be used with the newspaper or TV Guide listings and does not work with every program shown on TV. The VCR Voice Programmer works nearly anywhere, the company says.
Also, VCR Plus works only as a VCR programmer, meaning a viewer still must use other remote controls for the other functions of the TV, VCR and cable box. But Voice Powered says its device can serve as a single remote control that regulates all three systems.
David Ellis, a spokesman for Gemstar, agrees that VCR Plus is not a universal remote control, but disputes Voice Powered’s other claims.
“We have code coverage in better than 575 U.S. newspapers and every edition of TV Guide,” Ellis said. “So virtually any place in the country where TV Guide is sold will carry codes devoted to that market.”
Besides noting that the VCR Voice Programmer is more expensive than VCR Plus, Ellis also said the voice device “takes longer to set up and program than VCR Plus. The initial set-up can be as long as 90 minutes, and it’s much more complicated than VCR Plus.”
Bunk, says Voice Powered. The setup should typically take a consumer no more than 45 minutes, and needs only to be done once. Each device also can accommodate three additional voices.
Bissonnette also said the direct-sales approach for marketing Voice Powered’s device gives the company a higher cash flow and more control over its inventory, and it helps keep the price down by removing retailers and other middlemen.
“You can grow very rapidly once you have the formula down just by expanding the advertising,” he said.
Investors bought Voice Powered’s initial public offering of 1.3 million units, composed of common stock and warrants. The units sold for $4.25 apiece, and have since moved up to $5.375 as of Monday’s close on the NASDAQ market. Bissonnette, 43, retains a 28% voting stake in his company.
In the meantime, Voice Powered has invested more than $2 million in research and development and marketing to ready the device for consumers. And not surprisingly for a start-up, the company has amassed net losses of about $6 million since its inception.
So far, Voice Powered has advertised mainly on radio stations in selected big cities with Bissonnette doing the narration. It should be widely advertised nationwide by mid-1993, and Voice Powered expects to use about $1.7 million from the public offering for marketing.
He won’t disclose initial sales of the VCR Voice Programmer, but says “sales are matching our expectations.” Bissonnette also brags that his company, which employs 60 people, is “developing technology that even that Japanese haven’t been able to.”
And he said Sony or some other foreign electronics giant won’t be able to knock off cheaper versions of Voice Powered’s device by simply taking apart the device and studying it, because it “has built-in protections” in its tiny electronic circuitry.
The VCR Voice Programmer is built to Voice Powered’s specifications by an outside Malaysian manufacturer. His company also has one patent issued, and three pending, related to the gadget’s technology.
For now, it’s up to the marketplace to determine whether Voice Powered enjoys the same early success of VCR Plus, a challenge at a time when Americans are supposedly holding on to more of their disposable income because of the sluggish economy.
