Friday, April 10, 2009

Magna: DVR Use Will Grow 70% By 2014, VOD By 60%

Just because the web is hot for content doesn't mean that other types of distribution is declining. Television continues to be an important device to the home. The rise of HD, bigger screen TVs, and content when you want it, all makes TV a good business to be in. But with that being said, linear viewing, scheduled at their time, not ours, is not what matters. Magna research shows that on demand viewing, whether through the DVR or VOD channels, will continue to grow at extraordinary rates.

"Magna forecasts that in five years, DVR usage will grow more than 70%, to 51.1 million U.S. TV homes Magna estimates this will reach 43% of all U.S. TV homes in 2014, up from 27% as of the end of 2008...Video on demand, a more mature digital TV product than DVRs, will grow by 61% in five years to 67.2 million households -- about 56% of U.S. TV homes. Currently, at the end of 2008, there were 41.7 million VOD households, or 37% of U.S."

That increase in on demand viewing will absolutely lead to declines in live linear viewing of TV. Still, TV should invest in good content, knowing that the viewer will consume it in different forms, at the scheduled time, DVR at a later date, or picked off the VOD menu. That the advertising continues to get viewed and the eyeballs recorded, will mean that the programmer will continue to get paid.

The DVR device is friendly to the local affiliate because it retains their local ads; the VOD and internet are the enemy of the local affiliate because their local ad does not run. Ultimately, both the DVR and VOD rely on strong content to satisfy viewer interest. For their usage to grow as predicted, the content must remain interesting to the viewer. Why set the DVR if the show has no appeal.

And for VOD, consumers don't have to rely on setting up a recording in advance; they can catch up on their favorite shows on demand. And content doesn't need to be on a linear broadcast or cable channel to be available on VOD. VOD offers the consumer libraries of content not accessible elsewhere. Smaller programmers can distribute their libraries of content without building a 24/7 linear TV schedule. These offerings may range from a few hours to many, but are typically refreshed either weekly or monthly with newer content to enjoy. More choices to satisfy different interests.

As viewers continue to get comfortable with their DVR and VOD boxes, they will start watching on their schedule, not the programmers. And except for news or sports, on demand viewing lets you watch what you want, when you want, fast forwarding, pausing, and rewinding to catch all the dialogue and all the action. To me, it is the ideal way to watch TV!

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