Thursday, December 22, 2005

Will VOD Kill the DVR?

Call it Tivo or ReplayTV, the DVR is just the First Step

Will VOD Kill the DVR?” (posted on ReplayTVBlog.com) was something I ran across the other day that got me thinking. Obviously the answer will vary depending on your perspective. There are some great advantages to both of the technologies and I’ll be the first to admit that the DVR has TOTALLY changed the way my household consumes television. My 6 year old believes that all “live” television broadcasts can be paused, rewound and forwarded. Tivo and Replay executives certainly are not betting that the DVR is going away anytime soon however Cable industry honchos see it a little differently. For the MSO’s the DVR is currently providing them with a small revenue stream and presenting them with a much larger opportunity. For those of us, which have opted to upgrade to a set top box with a DVR integrated into it, we have also upgraded to the cable operators digital platform. This has fueled the industry’s recent revenue growth and opened the door for the subscribers to utilize the systems VOD offerings. Getting consumers to feel comfortable with using VOD has been one of the businesses bigger challenges during the past 24 months. Although U.S. cable television subscriber growth will remain flat through 2009, digital cable penetration is estimated to grow at a compound annual rate of 11%, reaching a total of 43 million households by 2009. The big opportunity for MSO exists in converting DVR users into VOD buyers. According to a study done by Lyra Research, people who own digital video recorders (DVR) are more likely to watch video on demand (VOD) than those who don't. Times are changing and one day the DVR may seen as old and unused as the VHS machines are becoming in my household!

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