Shipments double in '04: DVR players, and options, mushroom

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A plethora of digital video recorders set to make their debuts later this year could make TiVo the America Online of digital recording. While many consumers will begin to buy standalone DVRs without a service provider, newbies and renewing subscribers will likely continue to turn to service leader TiVo. But that's not all bad news for TiVo.

"The market is growing fast, but it's growing in both directions," said Ben Bajarin, analyst for Creative Strategies. "There's a solution for the people who want to spend under $100 ... and for those who want more service and extra content, there's TiVo and others like [Digeo's] Moxi."

But that last part is bad news. New services such as Moxi, as well as cable companies' private-label DVRs, will erode TiVo's market share. Currently, TiVo controls about 39% of the U.S. market for DVRs, according to technology consultant IDC.

47% growth rate

For DVRs overall, though, 2004 is expected to a boom year. In Stat/MDR predicts that 11 million units will ship worldwide, more than double the 2003 total of 4.6 million. In the U.S., IDC predicts an installed base of 28 million PVRs by 2008, a projected growth rate of about 47% each year.

Part of the growth will be driven by more choices. The up-and-coming breed of DVRs offers something for everyone: Some are portable, or connect to a personal computer, or include dual TV tuners (so you can record two shows while watching a third), or record in high definition, or come with both a DVD player and a PVR hard drive.

The last category, "smart" DVD players, are already popular in Japan. IDC predicts that by 2008, those combo devices will number 11.8 million, or about 40% of the total worldwide. No DVR/DVD combos have yet appeared in the U.S. market, but Mr. Bajarin said both Sony and Panasonic are interested in the possibility of rolling out machines here in the fall.

Another entrant are DVRs that connect to home computers. These devices use the hard drive of the PC for storage and come with connections to free programming guides through the Web. Users can record to DVD or CD as well as hard drives and like the other DVRs, watch programs at their convenience. One such device, Instant TV, is set to roll out next month from ADS and unlike other TV-tuner-type cards, plugs into a USB port instead of having to open the computer housing for installation.

Still, while most expect significant growth in the DVR market for the next few years, some offer a bit of caution as well. "The only question mark I have about the [DVR] market is the size of it," said Gartner Dataquest analyst Paul O'Donovan. "Five or six years ago, there was a study that said something like 70% of VCRs are used to play content but have never been used for recording. So there definitely is a big market for machines that just play content. But is there a big market for boxes that just record content? I don't know. This market may reach its ceiling quicker than we think it will."

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