In the last couple blogs, we’ve looked at the rise of subscription video on-demand (SVOD). One of the most significant (and symbolic) milestones for the SVOD industry is the penetration of on-demand services equalling that of DVRs (digital video recorders). So why has this happened? And, now that it has, what does this mean for the SVOD and DVR industries?
According to Nielson’s The Total Audience Report: Q1 2016, SVOD programming can now be found in 50 percent of American households. Considering that, in Q4 2014, this figure was only 41 percent, this represents substantial growth. However, during the same period of time, DVR usage has plateaued, with only seasoned users taking advantage of the technology (and even then only to watch an average of 33 minutes’ television a day).
In many ways, SVOD and DVR are direct competitors: both promise to give users the ability to take control of their viewing schedules, though they do so in slightly different ways. DVR allows users to record cable shows for viewing at a later time. SVOD companies upload original or third-party content to their websites so that users can choose which shows to watch and when.
A key difference, therefore, is DVR’s dependence on cable and network television: a DVR is only useful so long as the shows you want to watch are broadcast at some point by a network which you have access to. SVOD, on the other hand, does not depend on cable or network providers, and instead of offering users a way to bypass cable companies (and their fees) and source content directly. In other words, SVOD is a more complete offering – it does not depend on another industry and is thus able to offer subscribers content at a lower price and in a more convenient (no more programming recording gear or fast-forwarding through ads) way.
The growth of SVOD is undoubtedly due in part to convenience, but it is also helped along by its creating original, high-quality, and exclusive content. And the amount of this will only grow as the industry grows as a whole.
Furthermore, DVR is incredibly limited when it comes to sharing and watching content on different devices. And, since daily usage of smartphones and tablets has increased by 60 percent and 63 percent respectively, this is another major problem for DVR. SVOD providers, however, allow single accounts to be used on multiple devices (and will increase the number of seats per account for a fee) so that it’s easy to carry on watching the show you started in the morning on your laptop later when, say, you’re bored on the train with your smartphone.
So, whilst SVOD and DVR are competitor industries, SVOD offers users a whole host of benefits that DVR simply can’t accommodate. And this means that unfortunately for DVR, SVOD will continue to grow in popularity as the number of DVR users continues to fall.