Netflix Might Be Responsible for the Plateauing of DVR Growth

/ Dec 6, 2013

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According to a study from Leichtman Research Group, Netflix may be partially responsible for reducing consumer interest in DVRs. The study, which was released on Friday, states that in 2013, 47% of homes have a DVR. This number bodes ill for DVRs due to the fact that 45% of households had them in 2012.

The 2% year-to-year increase is especially felt because in 2007, 23% of homes had DVRs. As we can see, DVRs rose from 2007, but have now begun to plateau. According to the study, much of DVRs stagnation has to do with cable’s marketing strategy aimed towards convincing wealthier clients to buy multiple setups. Instead of advertising to those who cannot afford the service, cable is now attempting to grow its business within well-off, pre-existing customers. Based on data from the study, half of homes that do use DVR, have more than one unit. This number has risen from last years’ 43% and the year before’s 33%.

Another reason for the leveling off of DVRs is Netflix. Bruce Leichtman, president of the research group, told Deadline that the service has become a bonafide TV service in the past two years. “Especially younger people are not going for the DVR. It’s an expense thing,” said Leichtman. Based on the study, Leichtman found that around 46% of people who don’t purchase pay TV buy Netflix. While there may not be any direct evidence that Netflix leads to cord cutting, Leichtman calls this phenomenon “cord deferring.” That same number of non-pay TV subscribers who now pay for Netflix has risen from 34% last year.

As you would expect, Netflix subscriptions are on the rise with young people as well. According to the data, 51% of all 18-34 year olds subscribe to the streaming service, which is up from last year’s 40%. Those who do have Netflix tend to watch it often as well. Around 29% of users watch content on Netflix daily in 2013. This is a significant rise from 2010, when only 10% of subscribers streamed content everyday.

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