Cloud DVRs Catching On Amid Decline in Linear TV Viewing
Adding cloud DVR service as a feature option is a way for operators to add revenue and take advantage of the surging video market, according to a Parks Associates webcast. Cloud DVR can also be used to retain or lure new customers who want the flexibility of time-shifted viewing without the drawbacks of a hard drive-based DVR, said Parks analyst Brett Sappington.
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While Sappington referred to “significant volumes and growth in video,” the growth of video on unmanaged networks has been a “shock to the system” for traditional operators. As the number of subscribers shrinks, the volume of competition is ballooning, said Sappington. Parks is tracking 60-70 different over-the-top services, with many having entered the market over the past few years. Operators are looking for other opportunities to replace the declining linear TV business, with some -- Cablevision, Comcast and Dish Network -- offering their own OTT service, he said. Other potential sources of revenue are remote management and scheduling, catch-up and start-over features and cloud DVR. A poll of webcast participants found that 78 percent had remote management and scheduling available to them through their operator, 68 percent had access to catch-up TV, 59 percent had the start-over feature, but just 30 percent could get cloud DVR.
The challenges of offering traditional DVR service for operators include the cost and reliability associated with a hard-disk based device, lagging feature sets in comparison to consumer devices, a lack of a multidevice viewing option and few upsell opportunities beyond initial deployment, said Sappington. Operators that want to introduce new features may have to introduce new devices, another cost, he said. A traditional DVR offers little visibility into consumer consumption activity, when analytics play a big role in the discussion of video on managed networks and OTT, he said. The DVR is a “cave where no information comes out,” which he called a missed opportunity in understanding consumer usage patterns.
Hardware-based DVRs “are sucking power” when not recording or playing back content, said Yoav Schreiber, who heads product marketing for service provider video at Cisco, which helped sponsor the webcast. With cloud-based DVR, resources not being used for video recording can be used for another service, he said. “When you virtualize recording and storage it’s just an application running on a cloud infrastructure.”
Content rights are a major obstacle to DVR usage regardless of format and remain “one of the greatest restrictions on the ability of companies to offer cloud DVR,” said Sappington. Content companies are opposed to the concept of cloud DVR, he noted, citing long-held beliefs in the content community. Rightsholders are “anxious” about the idea of unlimited storage and its impact on content windowing, said Sappington. “If you’re a company that makes a living on licensing that content to different parties, does it devalue the content if consumers are able to store it forever and in unlimited quantity?”