March 30, 2004 12:34 PM PST

Study: DVR adoption on the rise

Digital video recorders are set to break out of their niche, and they have pay TV providers to thank for the movement.

Market researcher IDC said Tuesday that DVRs are finally catching on in increasing numbers with American consumers. At the end of 2003, there were 3.2 million DVR households in the United States, and the tally is poised for compound annual growth of 47 percent through 2008, to reach 28 million.

The rising adoption of DVRs--which use a hard drive to record television shows--has much to do with the competition between cable and satellite television providers. Initially, satellite providers promoted DVR-equipped set-top boxes to match cable companies' investment in video-on-demand, and now, the cable industry is being forced to respond, IDC said.

That trend may account for the relatively low market penetration of devices from TiVo, a company that has been practically synonymous with the product category. Despite the strong brand, TiVo accounts for just 39 percent of the U.S. market, according to IDC.

"For the first time, the DVR vendors are getting through to people and showing them that these devices are more than just high-priced VCRs," Greg Ireland, senior research analyst at IDC, said in a statement. "The pay TV providers can take a lot of the credit, and reap the rewards, for finally breaking through to consumers."

While the DVR market in Western Europe resembles that of the United States, Japanese consumers are starting to look to combination DVR/DVD-recording devices. Those hybrids will see shipments of 11.8 million in 2008, adding up to nearly 40 percent of the worldwide market, with the vast majority of the shipments occurring beyond the U.S. market, IDC said.

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low market penetration of devices from TiVo????
Assuming that the statement "3.2 million DVR households in the United States" is correct ...
and taking total Tivo sub numbers from their 4th quarter SEC filing:
Total Tivo Subscriptions 1,332,000 or 41.625% of the DVR households in the United States

...and echostar's number of 1,000,000 dvr subs in 3rd quarter of last year, plus 350,000 IF their growth equaled Tivo's (it's hard to tell, Echostar does not publish their dvr sub numbers):
Total Echostar DVR Subscriptions 1,350,000 or 42.1875% of the DVR households in the United States

That leaves 518,000 DVR subs for the rest of the market, or 16.1875% of the DVR households in the United States.

IDC considers that a relatively low market penetration of devices from TiVo????
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