Many financial analysts including Oppenheimer (2006) expect to see acceleration in subscriber growth. The consensus of industry analysts including IDC and Forrester Research is that DVR subscriber growth will hit a 60% CAGR over the next three years. We expect it to slow to 45% and 16% annual growth in 2007 and 2010, respectively. By the end of 2010 IDC estimates there will be roughly 52 million DVRs in the United States. Assuming an $8 monthly billing rate, we estimate the DVR market will be a $5.0 billion revenue opportunity according to IDC (2007).
Figure 1: Comparing DVR Product Segments Adoption Rates
Industry Chain Process
The industry relies primarily on a multi-pronged approach to distribution, as is shown in Figure 2. The figures included throughout the analysis highlight the distribution of DVRs by the specific channel shown. 60% of total DVRs flow through the DirectTV channels, and the remainder are sold through retail channels as the estimates show, cascading through the distribution channels shown. This distribution channel structure shown in Figure 2 also shows the dominance of TiVo in this marketplace.
Figure 2: Industry chain process. Source: IDC (2006)
Competitors
In conjunction with the en masse move of MSOs into the DVR/DVS market arena, Microsoft, Dell and HP have all announced plans to move into this marketplace. IDC (2006) does not see PC manufacturers having a significant impact on the overall market, but larger cable and satellite providers, partnering with MSOs, look to dominate the market.
References
Oppenheimer (2006) - Oppenheimer Equity Research. TiVo - Can TiVo Grow Profitably? Initiating Coverage. October 12, 2006. San Francisco, CA,
IDC (2006) - Content, Content Everywhere. White Paper authored in conjunction with Accenture and IDC. 2006. Accessed on May 10, 2007 from location: http://omnikron.typepad.com/ctc/21-June_Acc_Media_Content_Survey_1.pdf
IDC (2007) - the Expanding Digital Universe. White paper authored by International Data Corporation. Accessed on May 10, 2007 from location:
http://poland.emc.com/about/destination/digital_universe/pdf/Expanding_Digital_Universe_IDC_WhitePaper_022507.pdf
