DVR penetration to double in five years

By Ned Randolph -- Video Business, 1/3/2008

JAN. 3 | A new JupiterResearch report forecasts steady growth for digital video recorders in U.S. TV households over the next five years, which will create a challenge for advertisers, even though DVRs themselves face competition from video-on-demand and online video streaming.

According to the report, DVR penetration will almost double from 19% of TV households in 2007 to 35% by 2012, representing a net gain of 20 million DVRs.

Such widespread use of DVRs will create a problem for advertisers trying to reach those consumers who prefer to fast-forward through ads, says JupiterResearch analyst Michael Greene.

Active users—which constitute 60% of DVR owners—tend to skip more commercials. As a result, advertisers will have to adopt new strategies to reach consumers. Rather than fighting the behavior, advertisers and networks should embrace the DVR as a unique platform with its own advantages, Greene says.

DVRs, for example, offer more user interactivity with TVs. Advertisers also should be willing to experiment with different ad formats, such as overlay ads similar to those adopted by YouTube, to take advantage of interactivity and reduce the ability to skip ads.

“Product placement also offers a practical alternative to traditional ads. However, advertisers must carefully integrate their products into programs and ensure that product placement is logical and does not alienate consumers,” the report says.

Yet, of that same group of ad-skippers, many are more likely to migrate to other technologies, such as VOD, online streaming and DVDs, to maintain large libraries and catch up on missed episodes, the report says.

« Back | Print