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Personal Video Recorder: Mixed Impact on Home Entertainment

3 Sep, 2004 By: Erik Gruenwedel

In the ongoing technological assault on video rental and sell-through from video-on-demand and pay-per-view, the role of the personal video recorder (PVR) appears to be a nonthreatening one for the time being, according to industry observers.

That said, PVR use continues to rise, with more than 1 million stand-alone devices expected to be sold in 2004 — a 76 percent increase from last year, according to Sean Wargo, director of analysis with the Consumer Electronics Association. That figure does not include PVR devices offered by cable companies as a monthly service option.

In a survey of PVR owners, 72 percent of respondents said they were extremely satisfied with their TV viewing after purchasing a PVR, compared to just 7 percent prior, according to Scottsdale, Ariz.-based In-Stat/MDR.

“We're finally seeing PVR hit its stride,” Wargo said.

The advent of PVR devices equipped with a DVD player or recorder from Toshiba, Pioneer or Phillips is more about consolidating the home entertainment space than driving a stake through rental or sellthrough entertainment, Wargo said.

“It's too small of an installed base,” he said. “There may be some negative correlation between PVR movie watching and DVD consumption, but it's pretty small.”

Wargo said the current trend of home-theater-in-a-box is all about real estate: Consolidating the number of devices on a person's video or audio rack in the home.

“I would expect over time you would see a PVR built into a set- top box, which would also have a DVD recorder for that short-term archiving aspect built into one box,” Wargo said. “For some time, however, they are going to be more complementary technologies. The PVR is really meant for time-shifting TV shows; it is not intended for long-term capture of entertainment.”

As home video revenue for many, if not most, movies continues to exceed their theatrical returns and the time frame for their retail release continues to shrink, there exists a diminishing appeal to record them.

“Even if you have seen the film in the theater and you come across the issue of whether to buy, rent or record, you still run into issues with storage capacity on your PVR,” said Michelle Abraham, senior analyst with In-Stat/MDR. “You are not necessarily going to have the capacity to keep your top 20 movies if they are all two hours long.”

She said regardless of whether a fan of “Friends” has the storage capacity to record every episode, he or she would miss out on a requisite DVD attraction: bonus materials such as interviews, bloopers, trailers and behind-the-scenes footage.

“For every show collector, there is always one episode you haven't been able to get or extra outtakes that convince you to buy that disc,” said CEA's Wargo. “So I really view [PVR and video] as very separate mediums.”

Does the PVR diminish the retail appeal of classic TV DVD programming? Lyra Research in Newton, Mass., asked 600 PVR owners to estimate the number of DVDs or VHS tapes they watched during their TV time, with no distinction made between rented and owned titles.

As expected, the PVR appears to have had more of an impact on how they watch TV broadcast programs than purchased movies.

“The number of rented or owned videos did not differ between PVR and non-PVR owners,” said Steve Hoffenberg, Lyra's director of electronic media research. Hoffenberg said about 3 percent to 4 percent of U.S. households have a PVR, which probably will increase substantially due to rollouts from cable companies, such as Comcast.

“On average, people were spending half of their TV viewing watching time-shifted programming,” Hoffenberg said.

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