DVRs aren’t just about skipping commercials anymore. They’re about providing a digital entertainment connection.
Commercial broadcasters who’ve seen personal video recorders as an ad-skipping threat might now view them as an audience-capturing opportunity. In global markets where DVRs are just arriving, they’re promoted not as recording and storage devices but as “an experience,” says TiVo CEO Tom Rogers, a Mipcom keynote speaker.
TiVo’s iconic brand is built around the company’s much lauded search-and-suggestion interface. Connected to broadband, DVRs can deliver dozens of branded channels like TiVoCast and can access users’ digital video and photo libraries. TiVo is also a content retailer for downloadable video.
Rogers sees “the ability to get anything you want whenever you want — linear or broadcast video, online video, broadband content — with the consumer not having to know what the underlying delivery mode is. All they know is the Google-of-television approach.”
It’s “their own videostore in one place,” agrees Zodiak Entertainment senior VP of business development Patrick Svensk, whose global resume spans broadcasting, cable distribution and content production. He sees it all coming together in “one single subscription (that) follows them wherever they are,” and funnels it all to the TV screen.
That means “growth can also be driven by cable operators,” says John Senior, partner at strategy consulting firm Oliver Wyman, “if they upgrade their DVR boxes to make them Internet-capable.” In the U.K., the terrestrial Freeview+ service provides 50 free digital TV channels through an antenna-connected DVR that’s a one-time retail purchase.
Behind a single interface like TiVo lies a sprawling “ecosystem” of business opportunities, Rogers says, “which extends to ad agencies, television networks, audience research companies, Internet content players, cable, satellite, phone and mobile companies,” and beyond. Australia’s Seven executives cited future “interactive advertising solutions” at their DVR launch.
“It’s a holistic digital media strategy,” says TiVo international general manager Joshua Danovitz. “You want to have an ongoing content relationship with the consumer.”
In Australia, Seven network partnered with TiVo last year in launching a broadband DVR, to show viewers of the largest broadcast network they don’t need cable to get wide choices or nimble program search.
“What they’re saying is, hey, why assume broadcast gets marginalized in the world of a la carte and online?” Rogers says. “Broadcast can take the lead on distributing the box and frame the experience, and eventually bring in far more content than cable or satellite might.
“The game is not to try to stop (ad-skipping); the game is to try to mold your business to be lucrative in the new way the consumer expects to receive media.”
Strategy guru Senior says that with online video choices mushrooming, “Everybody has their eye on controlling the access point to Internet television or Internet video. ” His global report “TV 2013” found “the TV business has not just changed, it has been replaced by the video-distribution business.”
DVR users around the world already program their own viewing, the report said, using time-shifting and on-demand options more than half the time.
“We’ve found people couldn’t really see the value in a DVR until they had one,” Senior notes, “and then they say, I’ll never give it up, it’s the best thing ever.”
Penetration has reached deep in Japan, where DVRs last year were in half of all TV homes, thanks to brisk retail competition where even game systems can be DVRs. In the U.K. and Scandinavia, penetration reached more than one-third, according to 2008 statistics from ZenithOptimedia, while Nielsen now finds DVRs in 30% of U.S. homes, up from just 12% in 2007.