Cutting the (Video) Cord: Who Needs a DVR When You’ve Got Hulu?

by on January 24, 2009 · 16 comments

Digital video recorders (DVRs) may turn out to be the “last gasp” of cable, satellite and other traditional multichannel subscription video providers.  If users can get the same basic functionality (on demand viewing of the shows they want) over the Internet for free or paying for each show rather than a hefty monthly subscription, Who Needs a DVR?, as Nick Wingfield at the WSJ asks:

Among a more narrow band of viewers -– 18- to 34-year-olds -– SRG found that 70% have watched TV online in the past. In contrast, only 36% of that group had watched a show on a TiVo or some other DVR at any time in the past.

That last figure is a fairly remarkable statistic. Remember that DVRs have the advantage of playing video back on a device where the vast majority of television consumption has traditionally occurred –- that is, the TV set. Although it’s also possible to watch shows over the Internet on a TV set through a device like Apple TV and Microsoft’s Xbox 360, most people watch online TV shows through their computers — which have inherent disadvantages, like smaller screens and, in most cases, no remote controls.

Indeed, if users are going to buy a piece of hardware, why buy a DVR when they can buy a Roku box or a game console like the XBox 360 that will put Internet-delivered TV on their programming on their “television” (a term that increasingly simply means the biggest LCD in the house, or the one that faces a couch instead of an office chair)—and save money?

This is precisely the point Adam Thierer and I have been hammering away at in this ongoing series.  The availability of TV through the Internet and the ease with which consumers can display that content on a device, and at a time, of their choosing are quickly breaking down the old “gatekeeper” or “bottleneck” power of cable.  Let’s see how long it takes Congress and the FCC to realize that the system of cable regulation created in the analog 1990s no longer makes sense in this truly digital age.

  • http://www.techliberation.com Adam Thierer

    It really is amazing to think that we've seen the old — I mean really old — broadcast television business model reinvented on the Internet. Not only is it the case that we are watching these shows without remote control capabilities, but we are also watching mass market or product sponsorship advertising around those online shows. That is the 1950s over-the-air TV business model !! As Yogi Berra would say, it's deja vu all over again.

    [For you youngsters out there, go look up "Texaco Star Theater" on Wikipedia. Or just read this: http://techliberation.com/2008/07/30/product-pl... ]

  • http://www.videoproductiontips.com Lorraine

    Watching “TV” on the internet gives complete freedom of choice which is the #1 attraction for people.

    Of course without a good and reliable way of monetizing the online video experience, people might find themselves stuck watching bad amateur videos instead of slick, expensive TV shows.

  • http://techliberation.com/author/berinszoka/ Berin Szoka

    Exactly right, Lorraine, which is why it's so critical that these Internet TV websites come up with a way to produce a decent revenue stream from the advertising associated with their video–which means figuring out how to target ads to the interests of viewers. I've been working on a piece about this issue. Stay tuned!

  • Darryl

    For one Hulu and the other devices/services you talk about are not available outside of the US. And second they don't show HD content, once you have started watching lots of HD content on a big TV it is hard to watch standard def.

  • Ryan Radia

    Hulu does have some HD Content but not that much. More will certainly arrive as bandwidth costs continue to decrease and more users have interest in HD programming. Also, a huge number of Hulu shows are in 480p, which doesn't look that bad on a big high-def set.

    The US-centric nature of Hulu and other services is annoying, but it can be circumvented by tunneling your connection through a US-based server. Tor and Anonymizer are two methods of doing this.

  • http://bennett.com/blog Richard Bennett

    Since I have a TiVoHD and three ways to get Netflix Instant View, I haven't had much occasion to use Hulu. I forget to record the BCS championship game between Florida and some team that the Longhorns trounced, so did check it out on Hulu. Resolution was a little better than SD, but the playback was very herky-jerky on Vista. I don't get that effect with Netflix.

    Given that Hulu is just re-streaming stuff that went out over the air for free, I don't see why I wouldn't just PVR the shows in the first place and enjoy the higher resolution. Tivo lets me skip the commercials, gives me a better picture, isn't herky-jerky, and doesn't count against my bandwidth cap.

    The benefit of Internet TV so far is long tail programming, like extended dressage coverage from the Olympics. It's definitely not ready for prime time.

  • atea41

    thanks!

  • http://www.ei42.com/fluffykins John K

    I've yet to see any targeted adverrtsing that is anywhere near relevant to my current interests. It always sems to be based on what I've done, not on what I want to do.

    As for Internet based “catch-up” TV, I gave up watching that when ads started appearing that I couldn't fast forward past.

    So you've blown it as far as I'm concerned.

    And you get my blackhole email adddress.

  • http://www.ei42.com/fluffykins John K

    I've yet to see any targeted adverrtsing that is anywhere near relevant to my current interests. It always sems to be based on what I've done, not on what I want to do.

    As for Internet based “catch-up” TV, I gave up watching that when ads started appearing that I couldn't fast forward past.

    So you've blown it as far as I'm concerned.

    And you get my blackhole email adddress.

  • http://www.ei42.com/fluffykins John K

    I've yet to see any targeted adverrtsing that is anywhere near relevant to my current interests. It always sems to be based on what I've done, not on what I want to do.

    As for Internet based “catch-up” TV, I gave up watching that when ads started appearing that I couldn't fast forward past.

    So you've blown it as far as I'm concerned.

    And you get my blackhole email adddress.

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