DVR Study Doesn't Ring Quite True

Posted by: David Kiley on September 8, 2005

Consumers are buying digital video recorders at a slower rate this year than last, according to a report by Magna Global.

In the second quarter, only 965,000 subscribers signed up for DVRs, down from 1.15 million in the prior quarter and 1.32 million in the fourth quarter of 2004. There are currently around 8 million DVR subscribers in the U.S, says Magna Global.

Brian Weiser, director of industry analysis at the Interpublic Group of Cos.-owned research unit told Ad Age.com:“If predictions of large numbers of DVR subscriptions in the next couple of years are unfounded — and the data we are seeing shows the rate of growth is slowing, not increasing — our point of view is that DVRs appeal to higher-end subscribers.”

What this analysis doesn’t address very well is that cable companies have not done the best job of marketing DVRs, and will undoubtedly respond to the downturn in purchases by making them cheaper to buy. DVRs may have a first-wave appeal to higher end cable subscribers, but as the rest of the cable world goes from analog to digital cable and cable companies get more aggressive at marketing and pricing the devices, strong penetration will continue. The DVR addresses one of the great un-met needs of the last thirty. Will it ever be 100% of cable subscribers? No. But at 8 million and climbing, they wind up in the most valuable consumer households advertisiers covet: upper income, well educated, busy.

 

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News, opinions, inflammatory meanderings and occasional ravings about the world of advertising, marketing and media. By marketing editor Burt Helm, Innovation Editor Helen Walters, and senior correspondent Michael Arndt.

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