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9M households won’t have cable by 2016

Janko Roettgers — Thu, 06 Oct 2011 19:09:47 +0000

The number of households without cable is about to triple in the next five years, according to a new report from media forecast company Magnaglobal. Cord cutting is playing a big role, but many households will also opt to never subscribe in the first place. DVR ownership growth will also slow as a result.

Magnaglobal’s new Media Access Quarterly report, which was released just in time for Adweek in New York, predicts that around four million households will have canceled pay TV and replace the service with online content by 2016. This number is up from just 455,000 households in 2011.

And there’s more bad news for cable companies in the report: The number of households that will never subscribe to pay TV will double from around 2.5 million this year to five million in 2016. Together, both groups will make up a whopping nine million households without a monthly pay TV bill.

All of this won’t just impact the bottom line of pay TV providers, but also the way people watch TV. One of the technologies negatively impacted is the DVR, which makes sense: As people cut the cord, they also have to return those cable DVRs they’ve been renting. And as they discover new ways to catch up on TV content online, recording shows isn’t as necessary as it used to be. One example: Time Warner Cable actually saw DVR subscriptions drop by 47,000 in the second quarter of 2011.

Does that mean the DVR is dead? Not so fast: Magnaglobal is still predicting that DVR ownership will grow over the next five years, but at a slower pace than previously forecast. The company now estimates that 57.5 million households will have a DVR by 2016.

Another interesting tidbit in the report comes from the U.K.: Brits have actually been using their DVRs less as the iPlayer and other online options have become more popular:

“Interestingly, time-shifted viewing as a share of all viewer hours has leveled off: the DVR accounted for 14% of all viewer hours in 2010 vs. 15% in 2007.”

Photo courtesy of (CC BY 2.0) Flickr user The Consumerist.

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Survey Says: 6 Out of 10 Americans Now Own a DVR

Janko Roettgers — Wed, 18 Aug 2010 14:48:32 +0000

The majority of U.S. viewers now use time-shifting technology to watch their TV, according to a new survey conducted on behalf of Comcast. The AP reports today that Comcast had market researchers poll 1000 consumers — not all of whom were Comcast customers — and 62 percent of the respondents said that they’re using some sort of time-shifting, including online catch-up, DVRs and VOD. Six out of ten said that they own a DVR. 84 percent of the time shifters say they use it significantly more than three years ago.

I was very tempted to pull a Chris Anderson and declare linear TV to be dead, but TV By The Numbers reminds us that Nielsen tends to publish much lower numbers, estimating that only about 37 percent of all homes have DVRs.

So what is it? The truth may be somewhere in the middle, with Nielsen being much more conservative in its estimates, but the AP report also shows that there is some evidence for a significant shift: HBO’s Entourage show is now watched by an average of 1.78 million viewers when it first airs on Sunday night, but an additional 1.87 million viewers watch it time-shifted via their DVR.

Also encouraging for Hulu and Co: 17 percent of the survey’s respondents said that they’re going to watch at least some of this fall’s TV programing online.

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ESPN Leads the Way Over the Top, But Will Others Follow?

Ryan Lawler — Thu, 01 Jul 2010 20:00:45 +0000

When Microsoft announced that ESPN would make live and on-demand video available through its Xbox Live service, the news had strong implications for mass adoption of cable services being delivered over-the-top.

TiVo, Meet Hulu: Are DVRs Still Relevant?

Janko Roettgers — Mon, 14 Dec 2009 20:57:11 +0000

TiVo is hurting. That’s the gist of a story today from Multichannel News about the fate of TiVo, which lost 314,000 subscribers last quarter. All in all, the DVR maker is now down to 2.7 million subscribers. That’s 62 percent less than during its heyday in 2006.

TiVo’s recipe for recovery includes building alliances with cable and satellite providers — the very companies that commoditized DVRs by replacing TiVo’s expensive hardware with cheap, generic recorders. The company now hopes to gain ground by recasting itself as a type of Google for traditional TV programming and online video. The question is: Will cable companies and consumers bite?

Let me start off with a quick anecdote. I moved from Los Angeles to the San Francisco Bay Area this summer, and somewhere during that move, my TiVo remote got lost. Now, if you don’t own a TiVo, you may not know this, but you can’t do anything with it without a remote. I’m a lifetime subscriber, so not using my TiVo didn’t cost me anything. Still, initially I was pretty irritated. But then I started to rely 100 percent on Hulu for my shows, and it has since replaced my DVR.

I guess this isn’t really representative of how people are watching TV, especially given the fact that bringing Hulu to the big screen still remains a hurdle. Still, I had to think about my lost remote when I read today’s Multichannel News story. Writer Todd Spangler is chronicling how TiVo has been courting cable companies like RCN and the UK’s Virgin Media by telling them it can offer more than just a DVR. TiVo wants to be a Google for video, offering the ability ”to search and discover video content across TV, VOD and the Internet.”

Apparently that pitch helped seal the deal with Virgin and RCN, but you gotta wonder if that’s enough to save TiVo. Manufacturers of cheaper cable and satellite DVRs have already begun to embrace Internet video as well. Makers of Internet-connected TVs and devices like the upcoming Boxee box, on the other hand, are betting on the fact that you don’t need DVR functionality to watch online video, and consumers are certainly not shy about using the Net as a sort of TiVo in the cloud, clocking hundreds of millions of views each month on Hulu.com alone.

Still, TiVo hasn’t completely given up on the consumer market. The company struck an alliance with Best Buy earlier this year which will bring us devices “that will be integrated with Best Buy’s digital content offerings,” Multichannel News reminds us. In other words: We’re gonna have a Best Buy-branded TiVo with music from Napster and movie downloads from CinemaNow. But is that really enough to convince anyone to spend not only money on the device, but also $12.95 per month of service, especially since all of the premium online content comes with additional costs?

What is your take? Are you looking forward to TiVo expanding its online reach? Are you happy with your cable DVR? Or are you, like me, replacing DVR time-shifting with online on-demand programming? Let us know in the comments.

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Letterboxed Messages Help Elude Commercial Zappers

Chris Albrecht — Mon, 18 May 2009 04:00:31 +0000

Obsessed was a movie starring Beyonce that opened last month just before the big summer blockbuster season. The TV trailer for Obsessed caught my eye not because it looked like a good movie, but rather because of its layout. The picture was letterboxed, but instead of empty black bars along the top and bottom, there was a static message in big white letters on top that had the film’s URL, AreYouObsessed.com, that persisted throughout the entire ad.

My first reaction was that it made the movie seem cheap, like it wasn’t memorable enough on its own so the marketing team had to slap a plug for its web site along the top. But as I fast-forwarded through it on my DVR, it dawned on me — with no sound and the action sped up, I could still read the web address. It may be a blunt way to get your message across, but it could have helped Obsessed open at No. 1 that weekend, pulling in $28.6 million.

Of course, there were other factors that contributed to the success of that movie (it starred Beyonce), and it wasn’t the first time that tactic was used. Teen-angsty vampire flick Twilight also featured the release date in the letterbox last year (and was a huge hit), and observers online report seeing it used for older films like Pineapple Express and Sex Drive.

This attention-grabbing tactic is just the latest salvo in the battle between commercials and DVRs. We are watching as the unstoppable force of DVR adoption meets the immovable object of TV advertising. According to Nielsen, 30.6 percent of the households in its people meter have a DVR, up from just 12.3 percent in January of 2007, and MAGNA predicts there will be 52 million U.S. homes with the gadgets by 2014. Research from DVR pioneer TiVo found that over 90 percent of DVR users “almost always” or “always” fast-forward through commercials.

During a speech at the National Association of Television Program Executives in Las Vegas in January, TiVo CEO Tom Rogers warned that the TV business wasn’t moving fast enough to adapt to ad-skipping.

Commercials and DVRs have been at odds since digital video recording was first rolled out, and advertisers have been looking for ways to overcome its increasing popularity. This past season, FOX tried its “Remote-Free” TV experiment for shows like “Fringe”, and ran fewer commercials (in a similar fashion to Hulu) while charging higher rates for them in an attempt to keep viewers from fast-forwarding through the spots. Unfortunately, the premium the network could charge for fewer ads didn’t match what FOX would have made selling more ads at lower prices, and it canceled the project last week.

A more extreme example came about last year when TBS made a snarky attempt at getting viewers to watch promo spots by having someone walk on-screen during a show and “pause” it while he gave his pitch. This was irritating to many viewers, to say the least.

Faced with that, filling the otherwise empty space above a movie trailer seems like a fair trade — unless every advertiser becomes obsessed with slapping static messages above their ads.

This article also appeared on BusinessWeek.com.

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