Growth of DVR reshapes video business, says iSuppli

El Segundo, Calif., Worldwide subscribers to Digital Video Recording (DVR) services will rise by a factor of nearly seven between 2010 and 2005, spurring major changes in the video service and content-provider businesses-as well as in the consumer-electronics industry, iSuppli Corp. predicts.

The number of global subscribers to DVR services will reach 83.4 million in 2010, rising at Compound Annual Growth Rate (CAGR) of 45.3 percent from 12.9 million in 2005, according to iSuppli. The figure below and attached presents iSuppli’s cumulative forecast of worldwide DVR subscribers.

Source: iSuppli Corp. March 2006 “DVR is driving the transition of consumer video consumption from broadcast-or linear programming-to non-linear video consumption and personalized viewing,” said Mark Kirstein, vice president, multimedia content and services for iSuppli.

“As a result, DVR is a pivotal disruptive technology as traditional TV programming adapts to an array of Video on Demand (VoD), Internet Protocol Television (IPTV) and broadband-distribution technologies. Furthermore, DVRs represent most consumers' first exposure to interactive television,” Kirstein added.

The impact of DVR goes well beyond just driving equipment sales and service subscriptions, Kirstein observed. Service providers are leveraging DVR to reduce churn and to support Internet VoD services. Content providers are transitioning their advertising strategies to leverage interactivity and to counter the skipping of commercials that DVR enables.

Meanwhile, equipment manufacturers are offering DVRs for multi-room applications and for media home networks. Portable DVRs also are emerging, aligned with Personal Media Players (PMPs).

While consumer adoption of DVRs initially has been a North American trend, deployments are accelerating in Europe, where both satellite and new IPTV offerings are emerging. Meanwhile, in Japan, DVR has proven popular in DVD players/recorders. Elsewhere in Asia, networked DVRs are appearing.

DVRs already represent a vibrant and growing market for both equipment and services. Total DVR equipment shipments will rise to 84 million units by 2010, while service revenue will reach $2 billion, iSuppli projects.

• How exactly are service providers-including IPTV, direct-to-home satellite and cable operators-leveraging DVR in their revenue-growth and churn-reduction strategies?
• How are content providers adapting to DVR?
• How will DVRs leverage broadband connections to enable Internet VoD and near VoD?
• How will Internet portal companies and video-search services intersect with interactive program guides and DVRs?
• How will multi-room DVRs impact in-home media networking?
• What impact will networked DVRs have?
• How big are the markets for DVRs in Asia and Europe?
• What is the market size for DVR equipment and services for cable, IPTV, satellite, DVD and other areas?
• How does DVR align with high-definition programming and PMPs?

Find the answers to these questions and more in Kirstein’s report, Digital Video Recording: Enabling Non-Linear and Interactive TV.

About iSuppli Corporation
iSuppli Corporation, the global leader in electronics industry intelligence, provides market intelligence services for the EMS, OEMs, and supplier communities. iSuppli employs the world's largest and most experienced staff of component, systems, and application market analysts. More information is available at www.isuppli.com .