TiVo's CEO Mike Ramsay wants to use that information to sell targeted advertising and aggregate data to the networks about TV viewing habits. Sure, you'll get some benefits when you buy TiVo's set-top box ($399), and sign up for the monthly service ($10) -- like the chance to search for programs you want, save up to 30 hours of programming and even fast-forward through the commercials. But don't forget: While you're watching your favorite programs, the TiVo is watching you, recording every channel click and timing how long you spend watching "Family Feud" and noting every Pampers ad you skip.

Many people don't seem to mind. In fact, some like the service so much that they're cracking the box open and adding more memory. And Ramsay, a thick-throated Scot and former Silicon Graphics senior vice president, remains convinced that the TiVo will radically change the way advertisers, networks and viewers interact. All this from a glorified VCR?

TiVo intends to put its product in 102 million homes, but figures show that only about 50,000 people have bought the TiVo since it hit the market last year. What's keeping them away?

We get asked that question a lot. First of all, though, it is all relative. Given that it's essentially the first brand-new category of TV capability in the past 20 years, its adoption rate is really pretty fast. You have to go back to the VCR itself before you find something that was really a fundamental change for consumers and if you compare the adoption rates of TiVo with those of VCRs, we're well ahead of them at this stage of the game.

Having said that, I think it is a new category, which means you have to educate people. It takes time to do that. And also I think price is a factor. At $399, you're going to get a cross-section of the population interested, but ultimately it has to get to the $299 to $199 and below before we really reach a mass market. We're hoping that the transition will get crossed with this year's Christmas season. But I think the major factor is the education of consumers, getting them comfortable with it and interested enough to buy it.

I hear that you've also had trouble educating the networks. Didn't CBS scrap a commercial of yours and pull it off the air?

Yes, that did happen. We did a series of commercials about lifestyle-changing aspects of TiVo. And the main theme was 'create your own TV network.' We did this extremely funny but irreverent ad where we threw a network executive out the window.

They thought it wasn't in good taste.

You don't require network cooperation, right?

Right. However, CBS, NBC and ABC and the other networks are the creative force behind television. It would be crazy to work against them, which is why we've worked with them from the beginning.

This technology, though, is not going to go away. This is how people are going to watch television in the future. And that's why they're working with us.

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