Digital video recorders could still achieve widespread adoption, despite the recent decision of key manufacturer Tivo to withdraw from the UK market. According to analysts at IMS Research, Tivo’s exit does not mean DVR failure in Europe.
In its
Worldwide Market for Digital Video Recorders report, IMS forecasts that 4.1 million DVR units will be shipped across Europe by 2007, producing a market worth over â‚Ź1 billion.
Tivo held a three year contract with Thomson Multimedia which produced the DVR units, but decided not to renew this contract when it expired at the beginning of this year. Reports have claimed that fewer than 50,000 of the £399 Tivo DVRs were sold, despite prices being reduced to £99 in the run up to Christmas.
IMS says that Tivo has also been participating in a marketing agreement with BSkyB, whereby Sky promoted the TiVo standalone service for the UK market; there is a similar agreement with UK cable operator NTL. However, BSkyB subsequently developed and began selling its own DVR – Sky+ – which competed directly with Tivo’s. This hurt the sales for the company and contributed to its decision to withdraw from the UK market, according to IMS.
Despite these developments, Europe is still a good potential market for DVRS, particularly those that are integrated into a television operator’s platform.
IMS says that major satellite operators (BSkyB in the UK, TPS in France, Via Digital in Spain, and Canal Satellite in Europe) have been proactive in offering the technology to subscribers. Whilst many cable operators are currently struggling financially, IMS Research believes that once they are again able to invest in their networks, Europe will present good opportunities for integrated cable DVRs.
“Widespread adoption of DVR will come with consumer education, the rollout of DVR by pay-TV operators and the modification of entrenched viewing habits,” claims IMS Research market analyst, Alison Bogle.
However, indications from the UK and US so far are that these viewing habits are so entrenched they are proving hard to shift (see Insight Analysis: Should Advertisers Fear Digital Video Recorders?). In the States only 1.8 million households were expected to have bought a DVR unit by the end of last year; this is forecast to rise to 19.1 million by 2006 (see DVRs Fail To Live Up To The Hype).
