Time Warner Faces Inferior DVR Legislative Action

Forrester recently did a survey where they asked consumers an open ended question about how they felt towards their DVR and 20% of the respondents used the word love to describe their relationship with the gadget.

When a consumer electronic device can generate this type of an emotional response, it’s safe to assume that for better or worse, the technology is going to have an impact. On a positive note, Forrester’s study revealed that this passion translates into DVR owners churning less and being more likely to pay for premium services.

less than 2% of people who owned DVRs have stopped using them. While today’s DVR owners are demographically mainstream, they are off the charts in their adoption of premium TV services and home electronics. Nearly half of them have a home network, which is four times the penetration of a typical online household.

When DirecTV first partnered with TiVo, not only were they able to use the DVR to attract cable subscribers to satellite, but they also saw a significant reduction in churn from subscribers who were using the box. Unfortunately for TiVo, when technology can have this signficant of an impact on a partner’s core business, companies will naturally want to bring it in house.

As long as DVRs work properly, consumers are in love, but when things start going wrong, this very passion can swing the other way and creates some real problems. In the case of DirecTV, by cutting TiVo out of their DVR equation, they’ve alienated a significant portion of their subscriber base, have subjected their customers to public beta tests and now they risk dramatically increasing the number of people who churn from their service, just so that Rupert Murdoch can make a few measly extra bucks.

As more and more cable companies have begun deploying their own DVR solutions, they’ve quickly found that the middleware has been more challenging then what they expected. While any product introduction is likely to have it’s fair share of glitches, because of the passion that consumers feel over the DVR, it’s creating some real headaches for telco execs.

Case in point is Time Warner cable. Considering that Time Warner owns 4.5% of TiVo’s stock, I’ve never understood why they haven’t been more willing to partner with TiVo, but the company has consistently chosen to cut them out and apparently their DVR is so bad, that it’s inspired Government officials in Lincoln City Nebraska to actually holding a public hearing to address whether or not Time Warner should be forced to give up some of their exclusive franchise rights over the bugs.

While a public hearing in Nebraska isn’t likely to force Time Warner to change their minds about supporting a more elegant DVR solution, it does speak volumes about how frustrated consumers are getting from being locked into a single brand. Once they try DVR technology, the know that they love it, but with cable companies allowed to lock up their systems from outside competition, it’s created an environment where bugs and glitches are considered acceptable as long as they don’t cost too much.

Considering that the cable companies have been locked in a battle with the FCC to extend a decade old requirement to open up their set top boxes to competition, this kind of consumer backlash doesn’t speak well for their chances of getting another stay on implementing cablecard technology into their own boxes. Someday I hope that consumers will be able to choose between one of many different operating systems for their DVR needs, but for the time being, the cable and satellite companies need to be more mindful of the lengths that their customers will go to, if you break something that they love.

Davis Freeberg is a technology enthusiast living in the Bay Area. He enjoys writing about movies, music, and the impact that digital technology is having on traditional media. You can read more of his coverage on technology at www.davisfreeberg.com. Davis owns shares of TiVo stock.