How the DVR is Changing the TV Industry—A Supply-Side Perspective

Abstract

The Digital Video Recorder (DVR) was often considered the awaited revolution in the way people use television; however, TV recipients seem reluctant to adopt this innovation. This article suggests a new perspective in that the DVR should be interpreted as a supply-side service innovation instead of a hardware consumer innovation. Evaluating the perceived attributes of the DVR as an innovation, it turns out that the supply-side service innovation is more likely to succeed. The article discusses the possible impact of the DVR on the value chain of television and on the exploitation chain of motion picture rights. Focusing on the features of time shifting and advertising avoidance, it is shown that the relevance of broadcasters will diminish in comparison to the distributors'. Finally, the article discusses how the DVR might develop as a new profit window in the exploitation chain of motion picture rights and thereby make a lead into video distribution without a physical medium. Altogether, it is shown that the distributors will benefit more from the DVR than the recipients will, and therefore, it is indicated to change perspectives and evaluate the DVR as a supply-side innovation.