Network, cloud DVR uptake to lag for at least five more years

Michelle Clancy | 13-02-2014

Comcast and Time Warner Cable et al may be prepping next-gen network- and cloud-based DVRs and set-top boxes (STBs), but old-school households will remain in the majority for the next several years, says SNL Kagan MRG.

Still, by 2017 the analyst forecasts the global network DVR households to reach nearly 19 million, with most activity occurring in North America, while cloud-based DVR households are expected to reach just over 14 million.

But those with DVR-enabled set-top box products will continue to account for the overwhelming majority of total DVR households for at least five more years, thanks to the simplicity and cost-effectiveness of existing DVR STBs.

"Since 1998, DVRs have allowed TV viewers to time-shift select video programming a capability that has been hugely popular among consumers, especially those in countries with high household incomes," the firm said in a research note. "More recently, an alternative concept to the DVR-enabled set-top box has emerged. This concept proposes taking the DVR, and its associated capabilities, and moving it either into the pay-TV network or potentially even into the public Internet cloud."

It added: "And while there are several factors driving DVR functionality toward the pay-TV network and further into the cloud, chief among them being reduced CAPEX, OPEX and increased revenues, there are also a number of key obstacles to overcome, to include cost and complexity of deployment and acquiring the proper content rights packages."

SNL Kagan MRG defines a network DVR service as 'subscriber controlled', meaning the DVR service end-user has the ability to select and record their own private copies of programming. An example of this type of service is Cablevision Systems Remote Storage DVR (RS-DVR). In contrast, a cloud DVR service is a service that is 'operator controlled', meaning that the pay-TV service provider controls the recording and availability of programming. Also referred to as a 'shared copy' service, an example of this type of capability is Swisscom's cloud DVR service in Switzerland.

"We believe that cloud DVR services will ultimately prove to be more attractive to pay-TV service providers, although it will likely take another decade for this shift to become apparent," the company said.