September 23, 2005

Study Says DVR Subscriber Rates Dropping

I don't know how I ever survived without a DVR. The beauty of being able to pause and rewind live TV is something you just can't understand until you actually try it. Magna Global recently released a study that showed in the second quarter of 2005, DVR subscribers dropped considerably versus the fourth quarter of 2004. Magna's conclusion is the drop is a result of DVRs appealing to higher-end subscribers.

I beg to differ that point. I've been saying for years that cable companies spend more time on commercials telling us to stop stealing cable than on letting us know how great their products are. The cool thing is that someone seems to finally agree with me. David Kiley of BusinessWeek.com responds to Magna Global's study:

What this analysis doesn't address very well is that cable companies have not done the best job of marketing DVRs, and will undoubtedly respond to the downturn in purchases by making them cheaper to buy. DVRs may have a first-wave appeal to higher end cable subscribers, but as the rest of the cable world goes from analog to digital cable and cable companies get more aggressive at marketing and pricing the devices, strong penetration will continue. The DVR addresses one of the great un-met needs of the last thirty. Will it ever be 100% of cable subscribers? No. But at 8 million and climbing, they wind up in the most valuable consumer households advertisiers covet: upper income, well educated, busy.

So how does the cable company fix the marketing issue? I'd offer customers a DVR free of charge for a week. Heck, I'd even drop it off and offer to pick it up. I guarantee that after a week it'll be awful hard to get that box back. But hey, if cable companies did that, they would probably have less time and money on "Stop Stealing Cable" commercials and we sure wouldn't want that.

At BusinessWeek.com