Digital Video Recorders: Future of Television

Digital Video Recorders, Video On Demand, IPTV and Download services alter the media landscape in dramatic and overlapping ways.

We have extensive experience in DVR and remain bullish on its place in the space. DVRs are generally thought of as digital version of VCRs, but are much more. Think of a DVR as a reasonably smart set-top box with a decent-size hard drive and a guide data manager. This allows the box to set up persistent and sometimes (depending on the brand) intelligent recording plans. This data generally comes from the cable or satellite provider, although it doesn't have to.

Upside: Most obviously, DVRs allow consumers to record TV content and watch it whenever they choose, however they want (e.g. with pauses, rewinds, or commercial-skipping) and whenever they want. Secondarily, they allow consumers to schedule ongoing recordings of a given series (the TiVo “Season Pass” metaphor), and in some cases to search for content by keyword via guide text... such as for all shows related to “Monte Carlo”, "Jackie Gleason " or “Civil War”.

Less known is the fact that a partition of many DVRs is controlled by the service provider and fed recordings by them. So the DVR can also function as a consumer-side Trojan horse, allowing service providers to “push” content for advertising purposes or for sale to consumers. In this model, service operators “push” content (e.g. the newest and biggest films in the MSO Pay Per View window) directly to consumers’ DVRs (network side), and offer these for sale. This offers the benefits of a server-based VOD services without the server infrastructure required by standard VOD services. The major advantage here is cost, both to the operator and to the consumer (who presumably will bear the costs of infrastructure downstream). In this way DVRs can be (and are being) used to compete with VOD Services.

Downside: The major downside of On Demand DVR services is variety, or lack of it. The amount of content that can be pushed to the consumer is limited to the size of the drive partition owned by the service provider. While this has grown from two or so hours on 1st gen boxes to 50 or so on some newer DVRs, it is unlikely to ever match the volume of offerings that can be served from a VOD provider.

DVR has been decried -- unfairly -- by studios and networks as the death of the 30 second spot. It isn't -- it's just the messenger, ringing the bell for the next round. Advertising will transform over the next decade to take advantage of a range of fantastic opportunities brought on by new technology -- and DVRs will facilitate this.

DVRs are a case study in the inverse of most marketing propositions. Instead of a great message and a mediocre product experience, DVRs have an ambiguous product message and a fantastic product experience. Consumers ask “So why exactly do I need this thing?” only to swear that they could not do without it later-- especially for flagship provider TiVo. As primary developers of many DVR services we’re consistently reminded of just how transformative a technology the DVR is. Recent announcements concerning software-only DVRs touch overlap with our VOD section and will be discussed soon.