The first piece of the puzzle is Windows 7, which has an improved Media Center. Instead of going over all the new features, I’ll point to an EngadgetHD review of Windows 7 media center. There are two major feature deficiencies compared to my current TiVo HD – one is that no matter how many tuners you have, it only buffers the channel you’re watching. My TiVo has two separate buffers for the two tuners (so I can switch between two NFL games on Sundays and scan through looking for good plays). The other issue is that you cant record the buffer – so if you start watching something and decide to record it, you’ll only be able to pick up from when you hit the record button. I could live without those features, but its less enjoyable.

Next, new features of Windows Home Server Power Pack 3 can automatically copy over recorded shows nightly into the “Recorded TV” folder on the server and can convert them down to H.264 for mobile device playback. The previous Power Pack enabled a lot of content to go from your WHS box to the Media Center PC. Combined with integration in Windows 7 Libraries, it’ll make those videos available on all your Windows 7 computers. This would allow “archiving” of TV shows to

Finally, the Pièce de résistance is the most recent revelation that CableCard adapters can be installed in home-built (non-OEM) PCs. This means I can go buy my parts of Newegg and then put the HTPC together and stick it under my TV and get full, glorious digital cable and in the form factor, with the options I want (and not paying a premium for a Dell or HP badge on it). One card has already been announced – Centon which will allow up to 2, 4 of 6 tuned channels at the same time (my TiVo HD only does 2) and the 4 tuner card is due out sometime in Q1 2010.

There are a few caveats. First is that the CableCard will still obey the copy protection rules that are sent out with the programming. There are four states – copy freely (0×00), copy no more (0×01), copy once (0×02) and copy never (0×03). Only copy freely will allow you to pull the content off the DVR and then downres it to your iPhone or Zune HD, though the OS will let you copy the other copy protected videos off the computer, you just cant play it back unless its on that computer. Most content on digital cable is copy freely, with the only exceptions being the premium digital channels like HBO and Cinemax.

The next caveat is that CableCard is a dying technology, slowly being replaced by Tru2Way. As Tru2Way displaces CableCards, you wonder about how long cable companies will continue to support them. They are currently required by the FCC to be supported, along with the Switched Digital Video (SDV) switching technology to allow the unidirectional CableCards (and their hosts – a TiVo or PC) to talk back to the cable company to request channels being broadcast using SDV.

After looking over all the features, it looks like a HTPC (with HDMI out and 5.1 audio of course) could certainly replace my TiVo HD unit. Unless TiVo starts adding meaningful features (uPnP support would be one, capable of decoding MP4/H.264+AAC or AC3), I really don’t see why I should continue to pay them $12.95/mo. Its not even the patent issue (I think TiVo is in the right for going after Echostar after the underhanded things they pulled), rather its TiVo’s lack of commitment into turning the TiVo from DVR to home entertainment hub.

(Note: I had most of this written before the most recent Apple TV/DVR/Subscription rumor)

I’ll grant you that the segment of the market that would actually want this type of thing would be small – enthusiasts. However, its one of those situations where you need some sort of end to end solution to provide for this heightened level of functionality. DLNA can handle all the uPnP/streaming technical issues, the only problem is the TV supporting all the necessary codecs though some chip (MPEG-2, AVC, WMV) and some sort of UI that allows the user to select the music and movies.

The only companies I can think of that would be interested in an end-to-end solution are MS and Apple – and I think Apple tried that route with the Apple TV and it didn’t do too well, mostly due to the higher price of the device (local storage) and the lack of a dedicated media server. However, I think you could rebuild an AppleTV device from the ground up (ARM chip and video decoder – essentially an iPod Touch without a screen, sensors, mic or speaker), and only provide enough flash for the OS (streaming only, no local storage) you could trim the costs down to about $80 (and sell it for $129). To build it into a TV, the costs would come down even further (adding $100 to the price tag). If Roku can sell their streaming media player for $99, Apple should be able to sell a streaming only device for $129 (and have a “built in” version inside TVs for $100 extra).

The issue is that, on the Apple side, there is no iTunes media server product. It would act as a central storage system for media and then stream it to the client for playback. Microsoft has their Windows Home Server that can stream media but its somewhat expensive ($400+). Apple could be better served to let their time capsule and airport extreme hardware get firmware updates to allow for the devices to stream movies and music stored on them – this would allow for fairly inexpensive device support ($180 + $100 500GB USB HDD) and serve as a central storage point for all media.

Its not a pretty situation – from almost any angle. There are high start up costs for some sort of enhanced TV/media server setup, putting more storage on the device will push the price up (as is the case now with AppleTV), and just adding DLNA support doesn’t help most non-tech savvy people who otherwise cant share video from their computer to their TV (how much video would they have in the first place?).