Monday, January 26, 2009 - The Progress & Freedom Foundation Blog

Cutting the (Video) Cord: Who Needs a DVR When You've Got Hulu?

Digital video recorders (DVRs) may turn out to be the "last gasp" of cable, satellite and other traditional multichannel subscription video providers. If users can get the same basic functionality (on demand viewing of the shows they want) over the Internet for free or paying for each show rather than a hefty monthly subscription, Who Needs a DVR?, as Nick Wingfield at the WSJ asks:

Among a more narrow band of viewers -- 18- to 34-year-olds -- SRG found that 70% have watched TV online in the past. In contrast, only 36% of that group had watched a show on a TiVo or some other DVR at any time in the past.

That last figure is a fairly remarkable statistic. Remember that DVRs have the advantage of playing video back on a device where the vast majority of television consumption has traditionally occurred -- that is, the TV set. Although it's also possible to watch shows over the Internet on a TV set through a device like Apple TV and Microsoft's Xbox 360, most people watch online TV shows through their computers -- which have inherent disadvantages, like smaller screens and, in most cases, no remote controls.

Indeed, if users are going to buy a piece of hardware, why buy a DVR when they can buy a Roku box or a game console like the XBox 360 that will put Internet-delivered TV on their programming on their "television" (a term that increasingly simply means the biggest LCD in the house, or the one that faces a couch instead of an office chair)--and save money?

This is precisely the point Adam Thierer and I have been hammering away at in this ongoing series. The availability of TV through the Internet and the ease with which consumers can display that content on a device, and at a time, of their choosing are quickly breaking down the old "gatekeeper" or "bottleneck" power of cable. Let's see how long it takes Congress and the FCC to realize that the system of cable regulation created in the analog 1990s no longer makes sense in this truly digital age.

posted by Berin Szoka @ 9:40 PM | Cable , Internet TV