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Service Providers Driving DVR Market

Michael Harris
Michael Harris

The release of third-quarter results today by digital video recorder (DVR) pioneer TiVo Inc. makes it crystal clear that satellite and cable service providers are now driving adoption of the technology. In its earning release, TiVo crowed about its installed base of 2.3 million DVR subscribers, double its total a year ago, thanks to the addition of 419,000 subscriptions in Q3. However, nearly all of that growth comes from TiVo's distribution partnership with satellite powerhouse DirecTV. Indeed, three-fourths of TiVo's Q3 additions came from DirecTV, and the satellite provider now accounts for more than 60% of TiVo's total customer count. By itself, TiVo added only 103,000 customers in Q3, bringing its total to a mere 890,000. If its DirecTV relationship crumbles, TiVo is toast. The DVR trailblazer is simply being overpowered by digital TV service providers. Time Warner Cable alone added more DVR subscribers than TiVo in Q3, a total of 118,000, bringing its total to 709,000 as of September 30. At the end of the third quarter, Comcast said it had nearly 870,000 set-top boxes in customers' homes offering HDTV and/or DVR service. While TiVo is a true technology pioneer, the company just doesn't have the marketing power to win the DVR consumer market.

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