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Network-Based PVR Model has Its Challenges

Network-based personal video recording (nPVR) stands as a technology that could radically change pricing metrics, advertising, and content distribution on video networks. Once the technology is proven and content providers sign on, according to a new study from ABI Research. The nPVR model will help to fuel the overall digital video recording (DVR) market, which will grow from about 20 million subscribers last year to more than 250 million in 2011.

"nPVR offers substantial benefits to service providers in terms of cost." says principal analyst Michael Arden. "But nPVR has to prove that its technology is as good as client-side DVR set-top boxes, and it raises serious issues with some content providers, issues that they are willing to take to court."

DVRs have been around for some time, in the form of hard-disk-equipped boxes in consumers' homes that allow them to record program content and replay it at will, in the same fashion as a VCR. The question in the coming years is how much of that function will shift to the operators' networks. The nPVR model allows any two-way digital set-top box (STB) with a proper software upgrade to act as a DVR: the content is stored on a server in the network.

The lower per-user cost of this centralized storage for network operators, matched by the low cost of "thin" client STBs means that nPVR should prove popular in markets such as India and China. "In general, we see nPVR being adopted in areas where client-side DVRs aren't available," says Arden.

Some small nPVR deployments have been done in North America by video operators that save their self-produced content (mostly 24-hour news) on the network for later viewing. Particularly in the U.S., media companies do not want their properties stored on network servers, arguing that their royalties should be paid for each new viewing, not, as the operators claim, on a one-time broadcast basis.

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