The Critical 'I'

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Tuesday, December 09, 2003

DVR: THE MURDOCH FACTOR
i am your father, or who's your daddy
There is a spectre haunting television--the spectre of Rupert Murdoch. That was the mood among attendees at the last day of the television industry's final Western Show, as they fretted over what the 800-pound gorilla will do once his long-sought-after purchase of DirecTV is complete.

Most intriguing is the prospect of Murdoch spurring the mass adoption of digital video recorders through DirecTV:

But Mr. Murdoch's pledge of a satellite new deal that would include a DVR in every box was a source of concern. "You have [News Corp.], a very large, advertising-revenue-driven company, making the decision of moving into this new world, which is creating the response from cable to deploy PVRs," said Mindy Herman, president and CEO of E! Networks and a former Fox executive. "Hopefully people thinking through these decisions won't cut one of the great pillars of the cable programming industry. It would make no sense to anyone in this room to end up with a single revenue stream from subscription."

Other programmer fears, discussed in more private settings, were that Mr. Murdoch would pack DirecTV with exclusive Fox content and use the DBS menu to give prime channel placement to his own stations.

There are other bundled services that come into play: Internet access, telephony, satellite radio. But the DVRs appear to be the centerpiece, and more most immediate hook to grab new subscribers. Cable companies are starting to really utilize the boxes, as New York-area cable provider Cablevision is the latest to announce a rollout, partly in response to the success of rival Time Warner.

I think this activity bodes well for the future ubiquity of the DVR (in some form) in a majority of American households. It also underscores the need for DVR pioneer Tivo to find a cable/satellite partnership, or risk being rubbed out.