Post by dkennedy on Sept 8, 2005 5:46:14 GMT -5
Magna Global Study: DVR Penetration Slows
September 06, 2005
By Mike Shields, MediaWeek
DVR penetration has slowed, and new data from the biggest suppliers suggests that future growth may not accelerate as anticipated.
That's according the latest "On Demand Quarterly" report from Magna Global, which cites data from both DirecTV and Time Warner cable indicating that consumers are not flocking to DVRs as quickly as originally expected.
Only 7-8 percent of new DirecTV subscribers opted for DVRs in second quarter of this year, a rate which is only slightly higher than numbers seen last year, says Magna. Also, while Time Warner added 132,000 new DVR subscribers in second quarter -- that figure is down significantly compared to the previous two quarters.
DVRs, or digital video recorders, have made network executives weak in the knees, given their easy-to-use ad-skipping functionality. Originally the product of pioneers like TiVo (which added just 40,000 subscribers in second quarter), increasingly major cable and satellite providers have been offering their customers DVR subscriptions.
Yet unlike the adoption of previous hot entertainment technologies which saw popularity explosions, like the Web or DVDs, Magna predicts that in most markets, DVRs adoption will surge at first and then lose considerable steam. "DVR growth will slow significantly at all cable and satellite operators after an initial growth spurt lasting perhaps 2-3 years from launch of service in a given market," says the report.
One reason that adoption has been less than spectacular, says Magna, is that DVRs are simply difficult to market -- either because consumers don't 'get' DVRs or just don't seen the technology as being compelling. Magna also contends that vendors' strategy to charge a premium for DVR service limits its potential.
However, despite the underwhelming growth figures, Magna has not seen fit to lower its forecasts for DVR potential over the next five years, predicting that 33 million homes will potentially be zapping ads by 2010. To date, 8.3 million DVRs were deployed by the end of second quarter 2005, reaching over 7 percent of TV households.
September 06, 2005
By Mike Shields, MediaWeek
DVR penetration has slowed, and new data from the biggest suppliers suggests that future growth may not accelerate as anticipated.
That's according the latest "On Demand Quarterly" report from Magna Global, which cites data from both DirecTV and Time Warner cable indicating that consumers are not flocking to DVRs as quickly as originally expected.
Only 7-8 percent of new DirecTV subscribers opted for DVRs in second quarter of this year, a rate which is only slightly higher than numbers seen last year, says Magna. Also, while Time Warner added 132,000 new DVR subscribers in second quarter -- that figure is down significantly compared to the previous two quarters.
DVRs, or digital video recorders, have made network executives weak in the knees, given their easy-to-use ad-skipping functionality. Originally the product of pioneers like TiVo (which added just 40,000 subscribers in second quarter), increasingly major cable and satellite providers have been offering their customers DVR subscriptions.
Yet unlike the adoption of previous hot entertainment technologies which saw popularity explosions, like the Web or DVDs, Magna predicts that in most markets, DVRs adoption will surge at first and then lose considerable steam. "DVR growth will slow significantly at all cable and satellite operators after an initial growth spurt lasting perhaps 2-3 years from launch of service in a given market," says the report.
One reason that adoption has been less than spectacular, says Magna, is that DVRs are simply difficult to market -- either because consumers don't 'get' DVRs or just don't seen the technology as being compelling. Magna also contends that vendors' strategy to charge a premium for DVR service limits its potential.
However, despite the underwhelming growth figures, Magna has not seen fit to lower its forecasts for DVR potential over the next five years, predicting that 33 million homes will potentially be zapping ads by 2010. To date, 8.3 million DVRs were deployed by the end of second quarter 2005, reaching over 7 percent of TV households.