Digital Video Recorders - When is the tipping point?
By Rajesh Setty on Mon 27 Jun 2005, 1:03 AM - Leave Comment
DVR is an example of a game changing innovation. Just like Napster forever changed the way music industry thinks and works, DVRs are out to change the way TV industry thinks and works. TiVo and ReplayTV are the two prominent players and I am sure there are many more to come.
When I last checked, there were close to 1.9M TiVo subscribers and the
number is growing rapidly. This is a small number compared to the total
number of TV viewers but I am sure there is a point at which DVRs will
start causing a serious shift in the way the whole TV industry
operates. Here is a wild scenario (at that imaginary point)
* the number of people who don’t own a DVR does not make sense for advertisers to pay a ton of money for TV spots
* Ad rates for TV spots will drop
* Reduced revenue for TV spots means reduced spending by TV folks on quality programs
* Lack of quality programs provides lesser incentive for advertisers to advertise on TV
Add to this popularity of citizen journalism, podcasting (soon videocasting) will all put increasing pressure on TV channels.
On a positive note, whenever such a major shift happens, a ton of
opportunities open up for other innovators. Something to think about.
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Posted in the Business Models, Innovation, Main Page category.
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