MAGNA is out today with new forecasts on the adoption of DVRs and Video on Demand (VOD) in both the US and Europe. Here are some of the highlights from their US observations:
Updated DVR, VOD and Broadband forecasts through 2014
Our year-end 2014 forecast for DVR subscriber households is 52.3 million (44% of TV households), up from 28.6 million (25% of TV households) as of the end of the third quarter of 2008. We note that the aggregated impact of DVRs will likely continue to be outpaced by rising population and increases in consumption of conventional TV
Over the 10 years between 2004 and 2014, we can estimate that DVRs will contribute to a 4% erosion in total viewing impressions across all dayparts. However, rising DVR penetration will be more than offset by increases in TV consumption (which has been slightly less than1% per household in recent years) and increases in total households (which has been slightly more than 1%). These latter two figures will drive a 20% increase in total viewing impressions over this ten-year time-frame
Of course, while DVRs will continue to disproportionately impact younger target audiences and network prime time, the aging of our society and the gradually eroding importance of network prime time will likely render such targets incrementally less important in the years ahead
By 2014, we expect that true Video-on-Demand (distinct from the simulated VOD offered by DBS providers DirecTV and EchoStar) will reach 68.8 million households (approximately 57% of television households). This compares with 40.4 million VOD households (36% of total TV households) at the end of the third quarter of 2008
We estimate that 68.3 million households had broadband access as of September 2008, 63% of the country’s 117.7 million households. We expect that total broadband access will rise to cover 86.2 million households by the end of 2014.
During 3Q08, DVRs were added to 1.3 million homes while 1.5 million new homes gained access to VOD
We estimate that 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). By our estimates, the company now has 6.2 million households with DVRs (36% of total subscribers)
Despite a smaller overall subscriber base, similar dynamics are driving EchoStar’s DVR subscriber levels, which we estimate now total 6.4 million households (46% of total subs)
Meanwhile, Comcast added 300,000 advanced service customers during the quarter, and now has approximately 4.4 million DVR subscribers by our estimates – 18% of the company’s total. Advanced service penetration now stands at 43.5% of the company’s digital customer base. Although the company did not report VOD streams this quarter (which we estimate remains well above 20 per VOD-enabled household per month) management referenced that the core economic driver of VOD – pay-per-view movies – is growing “9% or so” a year at the present time
Time Warner Cable’s DVR growth continued to moderate 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 four million at quarter’s end, 30% of the company’s subscriber base
At Charter, the company announced on demand orders increased by 57%, and the number of VOD users climbed nearly 30% over the year-ago period, which compares favorably against the 15% increase in number of subscribers with access to VOD. The company also stated that DVR deployments are up by 33%, implying approximately 575,000 DVRs in its footprint (11% of total subscribers)
Mediacom stated during its quarterly earnings call that 32% of its 624,000 digital customers take either HD or DVR services. 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.
The full report which you can download here is packed with numbers on these trends as well as information about the cable industry's project CANOE and European trends as well.