December 10, 2008

By Jason Deign

If your idea of television is something that comes through an antenna then read on. Because for a growing number of TV viewers worldwide, content now come through sophisticated set-top boxes from vendors such as Cisco.

Research published in April 2008 by Forrester, titled Consumers and the DVR, shows "around 22 percent of U.S. households now have access to a DVR (digital video recorder) or DVR-type functionality of some sort."

In Europe, levels of DVR ownership are led by the United Kingdom (where 22 percent of households have a device), the Netherlands (11 percent) and Spain (10 percent).

Europeans use the technology for skipping ad breaks, although an equal proportion (65 percent) enjoy the fact that they can watch one show while recording another, and an even greater number (69 percent) like being able to watch programs according to their own schedule.

These figures may just be the thin end of the wedge, however. In a reader poll conducted for Cisco by Shiny Media, the UK's leading commercial blog publisher, almost 88 percent of respondents said they would like to skip the ad breaks in programs if they could.

All this points to a sea change in viewing habits that has, in fact, been some time in the making.

DVRs have been commercially available for a decade, most notably in the shape of the TiVo service in the United States and Canada, but have only recently begun to reach mass-market levels.

Leased DVR and subscriber estimates for Western Europe, from ABI Research, show nearly 7.1 million subscribers in 2007, growing to 10.06 million by 2013-with just a moderate compound annual growth rate (CAGR) of 6.05 percent.

For Eastern Europe, however, 2007 estimates were just 140,000 subscribers with growth to 3.6 million subscribers projected by 2013, a 72 percent CAGR. A number of factors seem to be contributing to the rise of the DVR.

One is that digital broadcast services are simply becoming more ubiquitous.

A few years ago there were just a handful of services but now they are cropping up everywhere, aided by the switching off of analog channels run by traditional broadcasters but also as a result of video service launches from telecommunications and Internet service providers.

A second, related factor is the convergence of IT and consumer electronics.

Today's PCs, laptops and mobile phones are increasingly becoming sophisticated multimedia devices with high-quality audiovisual capabilities, providing access to services such as video-on-demand which are changing the way viewers think about and consume video.

And a third element might be the market upheaval caused by the arrival of new entertainment technologies such as high-definition TV or network-ready gaming consoles, which are helping to create a demand for newer devices generally.

So what will it mean for traditional television if we all start viewing through DVRs? There are signs that we could start doing a lot more with our TV than just watching it, says Ashley Norris, director at Shiny Media.

"In our poll, almost 20 percent of people said they currently go online to get more information about what they were watching, more than 15 percent said they shop online while watching TV and 11 percent told us they chat online using instant messaging services," he says.

In addition, if they were given the option then 36 percent of respondents said they would like to be able to pause a live broadcast and resume watching it in another room and 13.5 percent said they would like to get recommendations on what to watch from other people.

"The people in our survey were relatively young, classic Generation Y individuals," Norris notes. "You can see that for them TV has moved away from being this thing where you consume content to a device which you multitask with while you are using your computer and your phone.

"What does that start to look like for people delivering Web-based video? Clearly, there is an opportunity to embed much more interaction."

Jean-Christophe Dessange, head of IPTV and New Media Solutions at Cisco Europe, calls this the transition from 'lean back' to 'lean forward' video consumption.

"Until now we have been forced to be passive consumers of television content, having to take what was on offer," he says. "With 'video 2.0' you will have more choice and you will be able to decide when, where and what to watch, not have the system make the decisions for you.

"And there are other benefits, such as being able to watch your favorite show as many times as you like without having to worry about scratches on the DVD."

Jason Deign is a freelance journalist located in Barcelona, Spain.