In the first part of my Cloud DVR (cDVR) blog series, I explored some of the primary lessons that we’ve learned in its formative years. But, as cDVR heads towards its second decade of use, what does the future hold for this media experience technology? Although some industry watchers might have expected the rise of SVoD/OTT to lessen demand for cDVR – the opposite has been true. Today, at least two of the top three pay-TV service providers across the 10 largest markets globally have some form of DVR capability. The last few years has seen at least one of these leaders move partially or fully over to a cDVR solution – which has heightened interest and, in a few cases, prompted rivals to follow suit.
For those operators that have been there since the early years and have made the transition, perhaps the greatest lesson learned has been the benefit of business agility. Without the limitation of Consumer Premise Equipment and with full control of the software stack and infrastructure, the pace of change has accelerated. Today, adding new features to enable new business models or meet changing subscriber requirements is vital.
This agility is exemplified by the rise of OTT and the consumer preference for on-demand content that sits adjacent to cDVR. One direction cDVR is evolving is as a way for pay-TV service operators to unify linear broadcasters into a converged OTT platform. Although several large broadcasters have created On Demand services, many smaller or more niche channels have not followed suit. Reasons are varied and include restrictive content distribution agreements (which prevent dedicated OTT/On Demand services) and a lack of financial motivation.
Evolving consumer viewing habits are driving changes in cDVR
As Pay-TV operators increasingly build cDVR functionality within their core OTT/OD offering, it makes sense for these platforms to integrate more closely with all broadcasters that are within the service delivery platform. This allows the broadcaster to offer a more compelling service while also providing additional monetization opportunities to cDVR recorded content through pre-roll advertising insertion. In recent times, cDVR adoption has been impacted by private copy copyright issues, meaning each scheduled or real-time recording request of a subscriber must generate a unique recording exclusively for them.
This situation is changing rapidly – partly owing to new technical solutions. For example, new services in the US now enable content items to be recorded within a cDVR and “checked out” like a book from a library for playback on a mobile device – and then checked back into the service for viewing on another device. This compromise means there is never more than one copy available for playback – allowing pay-TV services to remain legal within the private copy laws while still meeting consumer demands for flexibility. It also blurs the lines between what we consider as DVR (or cDVR) functionality and SVoD. To the consumer, this is quickly becoming a distinction without a difference. Ultimately, that blurring will lead to higher customer satisfaction as it speaks to a simplification of their viewing habits. This compromise looks likely to unlock the demand for cDVR – at least in North America – and persuade those holding out that cDVR is more than just a nice ‘to have’, but a necessary subscriber requirement.
cDVR: What does the short-term future look like?
As we move into 2020, it’s clear that as the number of streaming services such as Hulu, Sling and YouTube TV grows, consumers are likely to become even more frustrated by a user experience that is increasingly difficult to navigate. Innovative operators are increasingly integrating third party OTT services into the same User Interface. In the future, streaming services and comprehensive Virtual Multichannel Video Programming Distributors may start to offer an open cDVR platform that could finally deliver a unified UX, complete with integrated search, recommendation and multi-device access. As these providers struggle to differentiate themselves, the addition of integrated cDVR/OTT/On Demand capabilities will become table stakes.
To see a truly long-term impact, cDVR should be viewed in the context of larger ecosystem and lifestyle changes. If cDVR grew out of the necessity to support time-shifting (recording and replaying as opposed to live viewing content) and place-shifting (viewing on any device in any location with any screen-size), then what happens in an evolving world where 5G goes from infancy to ubiquity?
You can read the third and final part of my blog series to find out!
Click here to read the first part of Meir Lehrer’s blog, which looks into the lessons learned in the infant years of cDVR.