My Turn

Don’t Fret Yet, DVR Users

8/21/2007 11:18 AM

Hey, Time Warner Cable subscribers. They’re coming to your home soon to rip the digital video recorder out of the wall. So best hide it in the basement.

No, that’s not really happening. But you might think so from some of the Web backlash after a newspaper report Monday about the cable company’s plans to add a new service called “Look Back,” starting in South Carolina this October.

Bloggers weren’t keen on the initiative – which has been much discussed by Time Warner and builds on other headend-based features such as the “Start Over” function that lets viewers zip back to the start of a show in progress. “Look Back” takes it a step further and lets viewers call up shows that have already aired but haven’t been recorded on a DVR.

One headline was “Mock-DVR Shoves Ads Down Your Throat,” on a home-theater enthusiasts’ site. That refers to the inability to fast-forward through commercials, the aspect of the new free-of-charge service that drove the bloggers wild.

Others said Time Warner was trying to turn back the clocks on DVRs and described “Look Back,” “Start Over” and other initiatives as “crippled DVR-esque services” (Consumerist.com).

The newspaper piece, in The New York Times, quoted Time Warner Inc. COO Jeff Bewkes from the CTAM Summit in July. Bewkes said then he thinks consumers don’t really care that much about skipping past ads. They care about time shifting, or watching shows when they want to see them versus when they’re scheduled to air.

That dovetails with research coming out this week from Leichtman Research Group of Durham, N.H. “What I want, when I want (time shifting) and an easy way to record are viewed as the top two benefits by owners in a study that we just completed,” analyst Bruce Leichtman said. “Jeff is right. It is not about live TV and it is not about ad skipping. In fact, from a tracking standpoint, pausing live TV is losing its significance.”

ABC ad sales executive Mike Shaw told MediaPost’s MediaDailyNews last month he’d love to see cable operators disable fast-forward buttons when they deploy new DVRs. Consumers wouldn’t really mind, he said: "I’m not so sure that the whole issue really is one of commercial avoidance. It really is a matter of convenience–so you don’t miss your favorite show.”

MDN readers begged to differ! “The reason I own a DVR is to fast forward through commercials,” one commenter responded flatly.

Others said skipping ads wasn’t the main reason they got a TiVo or a cable DVR – but once a DVR is in the house, that’s a very popular feature, being able to zip through 12 minutes or so of ads in a one-hour show.

Nielsen surveyed DVR users in 1,750 homes and determined more than half were avoiding commercials – but also concluded that’s not as bad as some industry watchers assumed. Nielsen figures DVR penetration is only about 17% of 114 million U.S. TV homes, so half of that 17% is a small percentage. (Leichtman says DVR penetration is about 20%, but he still figures less than 5% of overall U.S. TV viewing is of recorded or on-demand shows.)

DVR fans’ anxiety is understandable, though. If DirecTV and Dish Network hadn’t aggressively pushed DVRs, cable operators might still be dragging their feet on the rollout. In addition to the capital costs for the boxes, DVRs are a threat to operators’ local ad sales because of the fast-forward button.

DVRs have proven to be a revenue generator, though. And operators apparently are seeing a chance to get even more revenue from them. Comcast is bumping up the subscriber price for DVR service by $3, to $12.99, at least in New England, the Boston Globe reported last week. Comcast cited higher costs for newer, higher capacity high-definition DVRs. That’s still less than rival Verizon charges for DVR service: $12.99, with an increase to $15.99 coming soon for new FiOS TV customers, the Globe said.

Bottom line: DVRs and their fast-forward buttons aren’t going away. Viewing features such a “Start Over” and “Look Back” – or free on-demand replays of ABC and ESPN programming on Cox Communications – are extras that will enhance a cable operator’s ability to retain video customers by making popular shows more accessible.

So don’t hide the box just yet.