- Published on 17 January 2014
Network DVR: Cloudy with a Chance of Mass Appeal
Five years ago, before the word "cloud" had been heard in the IT industry, Cablevision's innovative plan to let consumers remotely access and store programming in servers and related gear located in the cableco's network ran into a wall with content owners citing copyright concerns with their coveted assets.
After waves of unsuccessful litigation against the cableco and a change in content owners' fear-first-think-innovation-later mindset, consumers are on the verge of experiences the benefits of network DVR services offered by cablecos in partnerships with pioneers such as TiVo.
In 2008, the value proposition for service providers was the ability to harness economies of scale (cut operating costs) in storage and process powering – two shortcomings of in-home DVR devices typically equipped with limited hard drives and little software intelligence.
The consumer benefits are still avoiding stored programming storage limits and having an IQ-challenged box in the house. Add on access to advanced capabilities the cablecos and others can offer from their vast network resources to improve the time-shifted TV viewing experience, including search, discovery and access to stored content from multiple mobile devices.
Acting outside the Box
Comcast and DVR pioneer TiVo have announced plans to trial a network DVR service in the not-too-distant future that offers greater functionality and benefits than the offering attempted five years ago, a major milestone largely lost in the sensory overload and news-as-noise that was the Consumer Electronics Show (CES).
What makes today's network DVR service more appealing is that over the last few years, DVR functionality, and advanced features and functionality, have already been located in the network/cloud instead of the household my service providers such as Comcast, which showcased them and shared the supporting strategy at the 2012 Cable Show in Boston.
Five years ago, the primary benefit for consumers was storage space on the hard drive of their DVR, a release from a restriction that many encountered early on. Storage challenges were encountered by those TiVo-ing or DVR-ing (in HD) three-hour long professional sports games, multi-hour movies and an increasing number of original series in enjoyment of their newfound freedom from appointment TV.
While We Were Sleeping
Though the basics of network DVR stayed in place for several years, the capabilities of DVR offerings raced ahead, with TiVo at the wheel. It's that forward progress and achievements that can be easily added to the once plain-vanilla network DVR offering.
The user interface, programming guides and unified search capabilities have all bloomed. The latest models enable the ability to access and view video streamed over the web, this opening the door wide to OTT opportunities including and beyond Netflix, Hulu Plus and Amazon services.
Remote access today is more about viewing content on multiple devices outside the home, browsing available content and scheduling recordings through their wireless device. Check out TiVo's new Roamio line for more information.
Better still, today's TiVo units allow consumers to download and view stored content when outside the home on smartphones, tablets and laptops. All this progress should come as little surprise given that the DVR kingpin began working with cablecos years ago – when network DVR was all tied up - to help them on the software side of their TV offerings to create far better user interfaces and search capabilities.
The latest DVR family also provides consumers viewing suggestions and recommendations as well.
On an ironic note, the storage capacity on in-home DVRs has largely been eliminated as a limitation of DVR boxes though service providers still stand to gain big by leveraging the economies of scale associated with storage resources in their vast networks.
TiVo's Roamio line can store 75 to 450 hours of HD content, while cable provided units (typically much older) tend to top off in the 60s. As far as concurrent recordings are concerned, the TiVo units handle 4-6 while many service provider offering can only handle a few.
The Big Questions – DVR-as-a-Service
With DVR features and functionality added to the network as an alternative to in-home devices, the answers to certain questions will go a long way to determining consumer demand for the newer offering.
-How will cablecos and telcos market the service? (As an alternative or replacement to DVRs?)
-How will they price the offering? A single, all-inclusive monthly charge could prove alluring in a world of recurring fees that don't translate into actual features. (Regional sports network and broadcast TV fees for example). Will major features cost extra?
The all-in monthly charge could deprive operators of many additional revenue rivers. That's a delicate balance in a pay-TV world where you can't get a la carte TV, but you most always get a la carte pricing.
-How will current and longtime DVR users be addressed? Given that countless big and better features and functionalities have been added with each generation of DVRs, those with older DVDs could be great targets for a network DVR service.
-What about non-DVR viewers? It's more than likely they use video-on-demand (VoD) for free and see little reason to pay for a traditional DVR. If priced reasonably (with some beyond VoD features included) non DVR users could be swayed to a network DVR offering.
-What about ad-skipping capabilities? With VoD programming awash in ads that often can't be forwarded through, would an affordable network DVR service with some form of ad skipping create mass appeal in this group? We know how content owners feel about the Hopper from DISH. Tread lightly.
WARNING. Given the problems faced by Cablevision years ago, service providers will need to work closely with content owners, partners and other stakeholders to ensure no speed bumps or barriers to entry are encountered.
The Bottom Line
The case of the network DVR service is a rare example of the saying "good things are worth waiting for" applying to the tech industry as innovation usually waits for no one. That said, how the network/cloud based offering is delivered and priced to different groups of video viewers will determine whether the service has mass or minimal appeal.
Given that DVR technology and feature functionality has advanced rapidly while the network version was largely stuck in the mud, moving that intelligence into the network for greater flexibility, if nothing else, leads to the belief that network DVR will experience the former when deployed.