Marketing, Features Drive DVR Growth

TV watchers are enjoying the opportunity to exert more control over their viewing habits and programming options, thanks to digital personal video recorders (PVR or DVR) [define]. Ipsos-Insight estimates that nearly 6 percent of U.S. households say they own the device, and Parks Associates expects the number will reach nearly 25 million U.S. households by 2008.

Of those that are already time-shifting their television programming through DVRs, Ipsos-Insight identified satellite customers as being nearly twice as likely to own the devices as cable customers (11.4 percent compared to 5.6 percent).

Lynne Bartos, Cable, Media, Entertainment Research, Ipsos-Insight, explains the DVR penetration by satellite customers: “I think the satellite providers have been much more aggressive in their marketing to their customers. Keep in mind that the major cable operators such as Comcast and Time Warner cable have only just started to roll-out DVRs to their customers and it’s been on a market-by-market basis.”

Of the 1,000 U.S. adults that participated in the January 2004 Ipsos-Insight survey, 17 percent said they purchased the DVR from their satellite provider, while 15 percent of cable customers said they bought the unit from their operator.

Bartos comments on the 2 percentage point disparity: “…this is based on total DVR owners and since cable customers out-number satellite customers (in the universe) by 3 to 1 – that’s why there’s not much difference.”

Penetration will continue to rise, as In-Stat/MDR predicts that unit prices will drop to under $30 in Europe and North America by 2007. However, nearly one-third of those who indicated in the Ipsos-Insight survey that they intended to buy a DVR already find the price reasonable.

While the implications of allowing viewers to skip commercials is still unclear to advertisers, the majority (28 percent) of Ipsos-Insight respondents indicated that they sometimes skipped past commercials, while 25 percent said they never did. One-in-five revealed that they skipped commercials every time they watched TV.

Research from Knowledge Networks/SRI indicates that nearly three-quarters of early technology adopters find that the ability to skip commercials is more important to them than time-shifting their programs. While 63 percent of early adopters (those that own any: DVR, HDTV, MP3 player, satellite radio, or other high technology) say that watching commercials is a fair price to pay for TV programming, 72 percent do not think that DVR ad-skipping capabilities should be restricted or eliminated.

DVR users may eventually trade control over commercials for their viewing data, much like grocery shoppers use loyalty cards in exchange for discounted prices or coupons, David C. Tice, vice president, client service, Knowledge Networks/SRI equated. While privacy is a big issue for consumers, there may be reasonable incentives or discounts that inspire cooperation.

Other DVR features that Ipsos-Insight survey participants always, almost always, or sometimes took advantage of are instant replay (56 percent), and the ability to pause live TV (55 percent).

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