VOD to hit 50% of households by 2016


The revised year-end 2016 forecast for DVR Subscriber Households now stands at 61.8 million (50% of TV households), up from 37.9 million (32% of TV households) as of the end of Q3 2010. By 2016, it is expected that VOD (redefined to include OTT services like Netflix, Vudu and Hulu) will reach 70.1 million households (57% of television households).  This compares with 51.1 million VOD households (44% of total TV households) at the end of Q3 2010, according to MAGNAGLOBAL’s January On-Demand Quarterly report.

As of the end of Q3 2010, some 83.6 million homes – 70.9% of the total – were online; 90.4% of these homes accessed the internet using broadband services. MAGNA’s long-term internet access forecasts now call for 98.8 million households to be online in 2016, of which 97.8 million will have broadband services. 

DVR subscription growth details in US:
• DirecTV now has 8.9 million DVRs by their estimates, as 75% of new subscribers took either HD and/or DVR boxes during Q3 2010. This compares to 7.6 million DVR subscribers at DISH Network. 49.8% of satellite subscribers now have DVRs.
• Comcast added 190,000 advanced service customers during the quarter. With 9.9 million HD and/or DVR subscribers, Comcast has approximately 5.8 million DVR subscribers –over 25% of the company’s total subscriber base.
• Time Warner Cable’s DVR subscriptions increased by 13,000 in Q3 2010 (vs. 61,000 in Q2 ‘10 and 111,000 in Q1 ‘10). Total DVR subscribers totaled 4.6 million at quarter’s end, 36.5% of the company’s subscriber base.
• Charter recently mentioned that nearly half of its digital subscribers have HD and/or DVR boxes, or approximately 36.3% of its subscriber base. Penetration remains low at predominantly smaller market cable systems; MAGNA estimates only 17.4% of Charter’s subscriber base has DVRs as of Q3 ‘10.
• At Mediacom, management recently stated that 44% of the company’s digital subscribers have HD and/or DVR boxes, approximately 26.2% of their total subscriber base. They estimate that only 18.0% of Mediacom’s subscribers have DVR services.

Global DVR subscription growth details:
• The leading market for DVRs –and on-demand content deployments –outside of the US remains the United Kingdom. With DVR penetration rates exceeding 70% at Sky and approaching 30% at Virgin, the two companies’ VOD services are also growing. Virgin announced that it delivered 73 million VOD views per month during Q3, to 59% (or 2.8 million) of its subscribers, equating to an average of 33 views per user per month in the quarter, up from 31 in Q2 ‘10 (the company reported 73 million video on demand views to its 3.7 million digital video subscribers). Unable to offer the same technological solution for VOD, towards the end of 2010 Sky began to phase the roll-out of Anytime+, expanding on its existing Anytime “push-VOD” offering to consumers with Sky’s broadband connections integrated into their set-top boxes. The new service –similar to DirecTV’s DirecTV Cinema–offers access via the internet to hundreds of content assets for on-demand retrieval.

RBR-TVBR observation: The word “households” in relation to VOD is getting more and more muddied as mobile video is expected to continue to be a driving force in the online video industry, with revenues expected to top $2 billion globally in 2013, according to ABI Research (which said the most significant position of the growth includes VOD). So mobile subscriber-based mobile VOD will only increase with more 4G availability and subsequent subscription offerings being rolled out by the MNOs (mobile network operators). It consumers are  watching VOD offerings regularly (which may include at home), the total VOD numbers may be quite a bit higher.