Is DVR the glue that binds families?

Tranter believes that the best way to deal with advertising is to make them more imaginative and entertaining rather than letting consumers opt to breeze past them. Replacing regular broadcast ads with interactive, targeted commercials and promotions, especially in exchange for free content, can be a way to keep consumers watching and put a more valuable customer in front of the advertiser, he said.

The survey comes at a time when the landscape for DVR is in flux. Today, DirecTV and TiVo announced they would offer a new high-definition DVR to their customers, as an addition to DirecTV’s own STBs. DVR pioneer TiVo, which has seen a steadily declining subscriber base for the past year, yesterday reported a second-quarter profit – its third quarterly profit ever. The company is up against network-DVR proponents like NDS, and it appears to be losing out – at least on the legal front.

Last week, the US Court of Appeals ruled in favor of cable companies to operate remote storage or network DVR, a move that also has potential negative ramifications for competing telcos as it poses a threat to one of their key differentiators, whole-home DVR. This legal fight between the entertainment and telecommunications industries and brought on by Cablevision is still not over. Many believe the TV studios, unhappy that copies of their TV programs were being offered without their permission, will appeal the decision to the US Supreme Court.

“Everyone agrees that the next step is to take it up to the Supreme Court,” Tranter said. “It’s no different than the VCR. We had this analog hole for awhile, where home recordings were accepted by the studio because there was degradation in quality. Now we’ve got digital content that is mobile and moving around. We see it from both sides. We provide our technology to the platform operators to do network DVR, but at the same time, we’re trying to maintain the business rules and the livelihood of the content provider. We try to keep both sides happy.”

Despite the potential pitfalls ahead for TiVo or telcos offering DVR, consumers may be the ones that stand to benefit the most from the regulatory rulings. Having the content stored in the network means more flexibility in programming options, more shows without a box in the home and cheaper STBs. With NDS’s survey finding that DVR owners watching, on average, slightly more than 4 hours of recorded and live television a day, the technology opens up the possibility for new service and incremental revenue streams, regardless of where it is in the network.

“At the end of the day, our products are being used to access that content, which is important,” Tranter said. “I think the bottom line is, this isn’t over, but it’s one of things with the Internet and over-the-top TV and really the hybrid nature, it’s not about storing the content in-home. You are going to get long-tail and niche content coming over Internet pipes to supplement your home-TV viewing. That will drive more legislation and more requirements of the studios and platforms to get together and work out the business rules. It’s still to be decided, but it is going to be forced due to the technology and how bandwidth is forced to the homes. It’s an inevitability.”