New York — Legally acquired content will drive sales of portable media players (PMPs), but how consumers are allowed to acquire that content could be just as critical in the product’s success.
Those ways will include PMPs that store DVR-recorded content transferred via digital or analog outputs, but their impact on sales might not be as great as authorized PC downloads, In-Stat analyst Stephanie Guza claimed. PC and broadband penetration is high penetration, DVR penetration is low, and consumer familiarity with MP3 downloads has made consumers “more comfortable” with the video-to-PC model, she claimed.
iRiver America president Jonathan Sasse and ABI Research analyst Vamsi Sistla, on the other hand, believe the DVR model is compelling (see story, p. 38).
Like music-download services, Sassi explained, local cable operators and satellite providers are content aggregators that act as one-stop shops for content from multiple content providers. One-stop shops eliminate the confusion and frustration that consumers encounter when they’re forced to go to multiple sites to download their favorite content because content providers strike deals with some sites but not others.
“We need a model somewhat like cable TV where you have access to all the content that you want for a certain rate per month,” Sasse said. To consumers, this model is more attractive than paying $1.99 per download of a TV episode or paying for multiple subscriptions, he noted.
In the DVR model, cable operators might choose to offer proprietary PMPs sourced from PMP suppliers, and they might sell them at subsidized prices to boot, Sasse said. Consumers, however, might want more choices in the devices they buy, he noted.
For the DVR model to work, ABI’s Sistla said he believes the cable operators will have to be included as a link in the value chain. “TiVo didn’t introduce a [DVR] product into the existing incumbents’ value chain, and the incumbents didn’t benefit,” he said, pointing to
TiVo’s low market share. “Cable operators will likely do it [offer digital transfers from their DVRs],” he said.