However, there was a wee loophole. The recordings on the drive were unencrypted. If you pulled the drive and connected it to a PC you could copy the raw H.264 files, as Dave Zatz discovered. A perfect HD piracy tool. Well, CNET News.com reports that Gefen is closing this loophole and will begin encrypting the drives. Why didn’t they do that from the start? Well, they had this to say to CNET:

Gefen did not anticipate that users would void warranty to crack the unit and use the internal drive in this fashion. The company is currently in the process of encrypting every internal drive of every HD PVR so this situation will be corrected.

So, either Gefen is run by truly oblivious individuals or they’ve managed to avoid reading every tech blog in the world. The very first thing we geeks do is violate the warranty and open the box up! See also my TiVo reviews with internal photos. Gefen was really surprised that someone a) opened the box, b) tried connecting the drive to a PC, and c) posted the results online? Really? I’d be surprised if someone didn’t do that with a new product! Since the boxes are not network connected, I don’t know how they’ll address units in the field. They may release a firmware update users can load over USB or SD – but they can’t force anyone to do so. If you run out and buy one now you might just get one from pre-encrypted stock. I’m just saying…

Now, if you’ll pardon me, I need to visit Gefen HQ. I have this old bridge over the East River that I’m looking to sell.

It does appear to record from HDMI, despite of HDCP. But it looks like the loophole is that it takes the digital HDMI signal, decodes it to analog, then encodes the analog signal on the fly as H.264. So there is no true digital copy being made. It looks like a very narrow range of features and capabilities. To me the most interesting thing is, as I said before, the first availability of consumer level chips capable of encoding HD on the fly, albeit high-end consumer level. As the pricing on these chips comes down we’ll likely see them used in more gear, and it’ll really be interesting when a real, full-featured product like TiVo makes use of them.

Well, the nice thing about technology is that it doesn’t rest. Each new generation of chips has been more capable and less expensive, and now we’re seeing HD-capable consumer products starting to appear. They’re still at the high-end of the consumer products, but it is inevitable that pricing will come down and we’ll see these capabilities in more products. I covered the Slingbox PRO-HD the other day. It isn’t a DVR, but it does accept HD component input at resolutions up to 1080i and it can encode and stream the signal in the same resolutions. Unlike previous generation products like the Slingbox PRO and Slingbox SOLO, which accept 1080i input but down-sample it to 640×480 for encoding, the Slingbox PRO-HD can stream up to 1080i. The same capabilities could just as easily be used to save the encoded video to media as to stream it – a DVR. The Slingbox PRO-HD will carry an MSRP of $399.99 when it ships in the third quarter.

But that’s not all, Gefen is releasing an HD DVR which can record from not only component input, but also HDMI. Now, details are thin, but I’d bet this unit has the same limitation as existing HDMI capture devices, namely that it can’t record content protected with HDCP. So don’t get too excited. Still, the unit can record HD video in resolutions of up to 1080i to SD cards (SecureDigital) or an internal 80GB hard drive. It is a fairly basic recorder, nothing fancy, and 80GB isn’t a lot of storage. The price? $999.00. Yeah, you’re not going to be picking one of these up instead of a TiVo HD, or even a Series3. But, unlike the TiVos, it could be used with HD cable or satellite STBs.

This isn’t what most people are looking for in a DVR – no scheduled recordings, let alone Season Passes – but the fact that the hardware exists is a good predictor for the future. Give it another year or two and another generation or two of hardware development, and the costs will come down. This is the kind of capability we might see in a future HD TiVo for applications where direct access to the digital stream is unavailable – like satellite or digital cable in other countries (Canada).

However, it is unlikely that you would want to use this kind of product when you have the direct option – it isn’t going to replace CableCARD. Why? Quality. As users of digital DVRs are probably already personally aware, SD digital cable channels look much better on a digital DVR than when recorded on an older STB-DVR pairing, like the TiVo Series2. And that is because the digital model records the native digital source as-is, while recording the same channel from a STB requires encoding it in real time in the DVR. Digital signals are normally encoded at the head end using powerful, multi-pass encoding systems which produce very high quality encodes with lower bandwidth requirements. When you can record that signal as-is, watching a recording is identical to watch live.

But when you use an STB that signal is received by the STB, decoded for output, output as an analog component video signal, then captured by the DVR and encoded. And the local encoding has to be done as a single-pass, real-time encoding, since the DVR doesn’t have the luxury of making multiple passes over the video to optimize the encoding. This produces a lower-quality encoding with higher bandwidth requirements. That’s just the nature of the beast.

Not to mention that it mens going back to all the mess we’ve gotten away from – connecting STBs to the DVR, using IR blasters, paying the box fees for the STB, etc. And doing dual-tuners would be complicated as you’d need two STBs and two IR blasters and would have to avoid cross-talk. That’s one of the main reasons the TiVo Series2DT only supports one STB. I think most users would rather deal with CableCARD than go back to that mess and accept lower quality. But when you don’t have another option, it doesn’t look so bad. The technological-economic barriers to a consumer level component DVR are falling.