Growth in sales of a digital video recorder or DVR-enabled TV set launched by the local arm of LG—the product can download up to 33 hours of programming that users can watch whenever they want and retails for between Rs100,000 and Rs150,000 depending on the model— should worry advertisers and broadcasters, say media experts, because the product doesn’t just allow viewers to watch programmes at their own convenience, but also helps them skip ads.
“DVRs run on a sophisticated technology that could wipe out the entire concept of prime-time television by allowing the viewers, and not the television channels, to call the shots on what they choose to watch and when,” said Atul Phadnis, chief executive officer and chief evangelist, Media e2e, a technology group that specializes in strategic business solutions for broadcasting and media companies.
Phadnis, who claims to have closely tracked viewership trends among consumers who have DVRs in the US, said the technology will force both advertisers and broadcasters to change their business strategy.
Four months ago, LG Electronics India Pvt. Ltd (LGEIL) launched a flat panel television set with a built-in digital video recorder. The company isn’t giving out numbers, but Sandeep Tiwari, head, product marketing, LG India, says the sales of these sets were between “12% and 15%” of the sales of flat panel TVs”. Girish Rao, vice-president, sales, LGEIL, added that the company “is looking to sell 100,000 flat panel” television sets in 2007. That would mean around 12,000-15,000 consumers would have LG television sets with DVRs (the company calls these television sets Time Machines) in their homes by the year-end. So far, no other consumer electronics firms has announced plans of launching a television set with a DVR, although several high-end entertainment PCs offer the same facility by recording TV programmes on to a hard disk.
According to eMarketer, a US-based research and trend analysis company, 16% of the US’ 310 million households had DVR-enabled TV sets in 2006; it says, that number will likely grow to 35% by 2010.
“The concern this (a DVR-enabled TV set) poses for advertisers is that consumers will, conceptually, show a propensity to time-shift their personal viewing and skip the commercials completely,” said Paritosh Joshi, president, advertising sales and distribution, Star India Pvt. Ltd. The threat is real, says Media e2e, which claims that data from The Nielsen Company and other sources show that 66% of DVR users in the US skipped ads aired during the last season of popular sitcom Friends.
Most broadcasters Mint spoke with said DVR-enabled TV sets would change nothing, although one did admit the need to look at possible solutions. LG, itself a major advertiser on television, isn’t worried. But rival Samsung India said advertisers would have to take remedial action if DVR-enabled TV sets caught on.