Emerging Technologies: Digital Video Recorders - US - September 2004

SUMMARY

The emergence of digital video recorder (DVR) technology in 1999 represented a major shift in home television recording. Mintel expects that these devices will become a ubiquitous technology over time and anticipates that service providers will continue to enhance features available to DVR subscribers. In comparison to the set-top cable box or videocassette recorder (VCR), the DVR is not expected to reach as high a penetration level as the VCR in the next five years. However, the estimated 42 million DVR subscriptions in 2009 will put many existing VCR units out of service as DVRs offer the same recording features as a VCR with much greater recording time and enhanced program recording features. Mintel also expects that consumers will eventually acquire both digital video recording service and DVD technology--rather than choosing between the two--as the technologies are complementary due to the fact that DVD media are removable and an increasing number of reasonably priced DVDplayers incorporate a recording feature.

DVR technology provides consumers with an upgrade in recording capacity and programming capabilities through service providers such as TiVo or Echostar, but more importantly represents a change in consumer thinking. As part of Mintels Emerging Technologies series, this report examines the growing market for DVRs and provides specific findings on this product category. Several other technologies are also covered in the Emerging Technologies series. Specific report titles are included in the section below.

TABLE OF CONTENTS

INTRODUCTION AND ABBREVIATIONS

• Introduction
• Other relevant reports
• Definition
• Abbreviations & terms
• Abbreviations
• Terms

EXECUTIVE SUMMARY

• Market growth pushed by cable and DBS operators
• Driven by ease of use and accessibility
• DVR acquisition becoming more consumer-friendly
• Cable gains ground
• Branded DVR service providers now in the background
• TiVo pushing for top of mind awareness...again
• Direct, retailer or authorized dealer
• DVR is a product for all consumers
• Digital recording exceeds consumer expectations
• Subscriber base on the rise

MARKET DRIVERS

• TiVo popularized the DVR market, DBS and cable redefined it
• Figure 1: DVR services offered by major cable and satellite providers, August 2004
• The DVR is revolutionary, but as familiar as a VCR
• Figure 2: Percent of U.S. households with VCR and DVD decks, 1999-2003
• A win for television viewers
• DVR technology abounds worldwide
• Figure 3: Global manufacturer shipments of DVRs, 2002-04
• Consumers rally around DVRs, but VOD and iTV are not out of the game

MARKET SIZE & TRENDS

• Figure 4: Total U.S. DVR subscriptions, 1999-2004
• Graph 1: Total U.S. DVR subscriptions, 1999-2004

MARKET SEGMENTATION

• Overview
• Figure 5: DVR subscriptions, by service type, 2002 and 2004
• Graph 2: DVR subscriptions, by service type, 2004
• DVR via DBS
• Figure 6: DBS DVR subscriptions, 2001-04
• DVR via cable
• Figure 7: Cable DVR subscriptions, 2001-04
• Standalone DVR
• Figure 8: Standalone DVR subscriptions, 1999-2004

SUPPLY STRUCTURE

FOREIGN TRADE

COMPANIES AND BRANDS

• Partnership mapping
• Figure 9: DVR supplier partnership mapping, September 2004
• Powerful partnerships command the category

DIGITAL VIDEO RECORDING SERVICES

• Figure 10: Subscriptions by DVR service providers, 2002 and 2004

DVR SERVICE PROVIDER PROFILES

• Moxi/Digeo
• NDS Group
• OpenTV
• TiVo
• Figure 11: Cumulative share of TiVo customers that are owned by TiVo or DirecTV, July 2003-April 2004
• Figure 12: Share of new subscriber additions that are owned by TiVo or DirecTV, July 2003-April 2004
• UltimateTV

ADVERTISING & PROMOTION

• TiVo has brand equity, but lags in sales
• Figure 13: Advertising expenditures of select DVR providers, 2001-03
• TiVo prepares for comeback
• DBS-authorized dealer promotions
• Cable companies at play too
• Advertising impact
• Net impact on advertising media mix
• Figure 14: Shifts in advertising expenditures, by type, 2004 and 2009
• On-demand advertising is here
• Effectiveness no longer measured by reach
• Branded entertainment will rise
• Ad content will integrate advertising and promotional campaigns
• Shift toward consolidated brand campaigns
• Online ad campaigns will be backed by bigger bucks
• Live broadcasts revitalized
• Efficient advertising

RETAIL DISTRIBUTION

• Introduction
• Figure 15: Retail distribution purchase channel, May 2004
• Retail sales
• The growing importance of "other" channels

THE CONSUMER

• Introduction
• Early lifecycle video products (ELVP)
• DVR ownership
• Figure 16: Incidence of owning DVRs and ELVPs, May 2004
• Important analysis note
• Figure 17: Incidence of owning DVRs and ELVPs, by gender, May 2004
• Figure 18: Incidence of owning DVRs and ELVPs, by age of respondent, May 2004
• Figure 19: Incidence of owning DVRs and ELVPs, by household income, May 2004
• Figure 20: Incidence of owning DVRs and ELVPs, by household size, May 2004
• Figure 21: Duration of DVR ownership, May 2004
• Figure 22: Total television viewing and recorded/time-shifted viewing per week, May 2004
• Figure 23: Expected versus actual DVR viewing, May 2004
• Figure 24: Incidence of same-day recorded program viewing, May 2004
• Consumer usage of DVR features
• Figure 25: Incidence of pausing during program viewing, May 2004
• Figure 26: Incidence of commercial skipping, May 2004
• Figure 27: DVR capacity and intention to upgrade in the future, May 2004
• Understanding emerging technologies and early adopters
• Figure 28: Technology adoption status of consumers, May 2004
• Figure 29: Early adopters and early majority consumers, by age, May 2004
• Graph 3: Early adopters, by age, May 2004
• Figure 30: Early adopters and early majority consumers, by household income, May 2004
• Intended future purchases of DVRs
• Figure 31: Incidence of intention to buy a DVR or other ELVP, May 2004
• Intended future purchases of emerging technology products
• Figure 32: Incidence of intention to buy any ELVP in 2004, by household size, May 2004
• Figure 33: Incidence of intention to buy any ELVP in 2004, by household income, May 2004
• Graph 4: Incidence of intention to buy any ELVP in 2004, by household income, May 2004
• Summary

FUTURE & FORECAST

FUTURE TRENDS

• Figure 34: iTV and VOD offerings of MSOs and DBS, August 2004 providers
• DVR will replace millions of VCRs; but may co-exist with the DVD-R
• High definition will define future market
• Figure 35: High-definition television unit sales proejctions, 2003-07
• Technology expected to impact advertising
• Figure 36: 2004 media forecast, by type

MARKET FORECAST

• Overview
• Figure 37 details the forecast of U.S. DVR subscriptions for 2004-09.
• Figure 37: Forecast of U.S. DVR subscriptions, 2004-09
• Graph 5: Forecast of U.S. DVR subscriptions, 2004-09
• DVR via cable
• Figure 38: Forecast of U.S. DVR subscriptions via cable, 2004-09
• DVR via DBS
• Figure 39: Forecast of U.S. DVR subscriptions via DBS, 2004-09
• Standalone DVR
• Figure 40: Forecast of U.S. standalone DVR subscriptions, at current and constant prices, 2004-09
• Forecast factors

APPENDIX: TRADE ASSOCIATIONS & PUBLICATIONS

APPENDIX: RESEARCH METHODOLOGY

• Consumer Research
• Sampling & Weighting
• Presentation & Definition
• Further Analysis
• Trade Research
• Informal trade research
• Formal trade research
• Desk & Internet Research
• Sources
• Definitions
• Forecasts

APPENDIX: WHAT IS MINTEL?

• Mintel Reports
• Global New Products Database
• Comperemediaｮ
• Mintel Services
• POS+
• Mintel Consultancy