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Enhanced Pay-TV DVR Growth will Exceed 84 Percent

As lower-cost online alternatives gain momentum, more Pay-TV service providers are attempting to make their legacy video entertainment offering more attractive by adding new features to their standard subscription package.

DirecTV’s Genie, Liberty Global’s Horizon, Dish’s Hopper and the HD DVR boxes that power Comcast’s X1 service all have something in common -- other than better marketing names than an older generation of boxes more commonly known by their model numbers.

According to the latest market study by ABI Research, these feature-rich devices bring more channel tuners to centralize digital video recorder (DVR) resources -- minimizing DVR conflicts, as well as better processing power.

This increased processing power improves responsiveness and the device user interface. ABI believes that deployment of the device will also act as a Trojan Horse -- while pay-TV operators try to extend home automation and energy management services into their subscriber homes.

These feature-rich gateway boxes were first shipped in small quantities in 2010. Last year North American and Western European operators shipped 4.5 million units in a market which is conservatively estimated to grow by 84 percent, reaching 8.5 million by 2018.

"Operators have made decisions to move to gateway boxes for economic reasons, but more and more they are leveraging the power of those boxes to improve the quality and consistency of the experience they offer to consumers," said Sam Rosen, practice director at ABI Research.

Advertising campaigns highlighting unique features will supplement price and bundle oriented marketing campaigns and target higher-end customers.

U.S. market satellite operator Dish networks, for example, will highlight the uniqueness of its watch anywhere model, which is less subject to content rights agreements than other pay-TV operators.

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