NEW YORK (AdAge.com) -- More than 52 million homes (44% of TV households) will use digital video recorders by the end of 2014, up from 28 million (25% of TV households) at the end of the third quarter of 2008, according to the Magna On-Demand Quarterly: December 2008.
|DVR subscriber forecast|
The agency estimates that between 2004 and 2014, DVRs will contribute to a 4% erosion in total viewing impressions across all dayparts but that that market saturation will be offset by increases in TV consumption -- slightly less than1% per household in recent years -- and increases in total households -- slightly more than 1%. Magna claims the increases in TV consumption and TV households over that 10-year period will propel a 20% increase in total viewing impressions.
Canoe not past rapids yet
And while anticipation for Canoe, the U.S. cable industry's advertising platform, is high, Magna said numerous obstacles will still need to be overcome, including an advanced-TV advertising market that is too small.
Magna believes Canoe must meet five requirements if it is going to succeed, including "identification of advertisers who uniquely benefit from Canoe given a wide range of media vehicles available to accomplish marketing objectives; TV inventory owners' ability to tap non-media budgets such as those for CRM or direct mail; advertisers' acceptance of the platform's limited footprint and limited inventory within that footprint; advertisers' ability to assess advanced TV's impact beyond cost-optimized reach and frequency; and continued financial support from programmers and MSOs."
"We are optimistic these challenges will ultimately be overcome, but an extended time-frame is necessary for them to be sufficiently addressed for the country's largest advertisers," the agency said in a statement. "However, as we have previously noted, different sub-segments of advertisers (such as small and mid-sized advertisers) may find these limitations to be non-issues, and to the extent the Canoe platform seeks to expand the market for TV to a broader range of advertisers, the platform may be better positioned to grow in the near-term."
Other findings from its quarterly report include:
- During Q3 of 2008, DVRs were added to 1.3 million homes while 1.5 million new homes gained access to VOD.
- DirecTV added 350,000 DVR subscribers during the third quarter, as the company added approximately 550,000 new net subscribers with advanced-service set-top boxes (HD and/or DVR), bringing the number of DVR subscribers to 6.2 million (36% of total subscribers).
- Despite a smaller overall subscriber base, similar dynamics are driving EchoStar's DVR subscriber levels, which Magna estimates now total 6.4 million households (46% of total subs).
- Comcast added 300,000 advanced-service customers during the quarter, and now has approximately 4.4 million DVR subscribers by Magna's estimates.
- Time Warner Cable's DVR growth continued to slow somewhat with DVR subs increasing by 150,000 in the quarter vs. 211,000 in last year's third quarter and 160,000 in the second quarter of this year; total DVR subscribers totaled just under 4 million at quarter's end, 30% of the company's subscriber base.
- Charter announced on-demand orders increased by 57%, its number of VOD users climbed nearly 30% over the year-ago period, and its DVR deployments rose by 33%.
- Mediacom stated during its quarterly earnings call that 32% of its 624,000 digital customers take either HD or DVR services and that VOD activity has risen, and the average user (likely a large subset of the total group of customers with access to VOD) accesses VOD content more than 17 times per month.