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Digital Services Play Nice

Feb 27, 2006  •  Post A Comment

Video-on-demand and digital video recorders go well together, a new study by Leichtman Research Group has found, quelling earlier industry concerns that the two services might compete against each other.

Instead, VOD and DVRs appear complementary and bolster use of each other, Leichtman President Bruce Leichtman said.

The study found that nearly three-quarters of VOD users who also have a DVR think their cable service is better because they have both services.

In addition, only 15 percent of respondents said that because they had VOD they didn’t need a DVR. On the flip side, only 19 percent said that because they had a DVR they didn’t need on-demand.

These new services are having their intended effect-lowering churn of premium, high-end customers. Leichtman Research Group reports that nearly two-thirds of the customers who have both new services say they are satisfied with their cable operator and aren’t likely to switch. In fact, fewer than 6 percent of digital cable customers who have used both services say they are likely to switch, compared with more than 14 percent of respondents overall.

The study found that VOD users who also have a DVR spend more than $76 a month on cable, which is 43 percent above average. About 78 percent of VOD users also get high-speed Internet from their cable company.

And while their household income is 42 percent above average, VOD users would prefer not to pay for prime-time programming. Only 16 percent of VOD users would pay 99 cents for a prime-time show on-demand, the study said.