The DVR was predicted to revolutionize the television world but did it?
In 2005, back in the Stone Age when industry publications were actually printed, I wrote an article for Mediaweek. In the article I predicted that even though DVR’s were starting to gain traction, they would not dramatically change the way television was watched or purchased.
I figured it was time to reassess this prediction based on the altered media world we all live in now.
The DVR Threat
The DVR was seen as a looming threat to television advertising. If people fast-forwarded through all the television commercials, what would happen to ad supported TV?
Eight years ago, DVR penetration was only at 7% but early adopters were piling on board. Gaining 5%-10% a year, DVR penetration is now up to 47%.
While DVR penetration is still increasing, it has slowed significantly from previous years. DVR factoids for your viewing pleasure:
- 71% of all television viewing is done live including almost all sports and news programming (Media Life Magazine, 2013)
- Of the programming that is recorded, 40% is never watched (Entertainment Weekly, 2013)
- DVR penetration increases as the household income increases topping out at about 68% with $100k+ household income (Nielsen, 2013)
Here’s a quick dose of reality. The DVR has been around for about 14 years. For comparison purposes, during the first 14 years of the old school VCR’s lifecycle, it had an 81% penetration. Even factoring in the rise in television households, if it's a race, the DVR is getting its butt kicked. Here is something else that’s shocking. Even with the decline of VCR penetration over the years, it’s still higher than the current DVR penetration.
While devices like the VCR and the DVR have contributed to changing television viewing habits, it’s really more about the behavior of time shifting a program than it is about the hardware that lets you do it. People want to watch the programming they want, when they want to watch it.
Platforms like Netflix and Hulu have capitalized on this as they allow viewers to access content when they want it. They make it easy for binge television where viewers can consume as much of their desired content as they would like.
A Video On Demand Future?
It's possible that Video on Demand (VOD) becomes the next game changer within the time shifting environment.
Viewers get to choose the program they want and watch on their timetable. VOD is hassle free, as viewers don’t have to remember to program a DVR or other device. Maybe more importantly, it’s free.
Network television studios still create the largest volume of quality content. In the current media model, this content can’t be supported without advertising.
The benefit for the networks is that the VOD programming retains the ads and viewers can’t fast-forward through them. If a program is watched within a three day period after the live airing, it's counted in that program’s ratings and ratings are advertising's media currency. Plus, networks always run ads promoting their other shows and additional support for them is a real bonus.
Will the DVR survive?
While video may have killed the radio star, the DVR can’t make the same claim on television.
If I had to make another Amazing Kreskin (Google it) prediction, with the speed with which technology is changing the communication world, both the DVR and VCR's days in their current form are numbered.
For a bonus prediction, the Seattle Seahawks win the 2014 Superbowl. Booyah!