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Digital video recorders fill satellite's VOD gap

Because they beam the same digital information to millions of subscriber households simultaneously, direct-to-home satellite services cannot offer traditional video-on-demand (VOD) service. However, satellite providers like DirecTV and EchoStar have begun competing with cable VOD systems by integrating TiVo-like digital video recorders (DVRs), directly into satellite converter boxes.

“I am not that alarmed by VOD,” Terry L. Ferguson, DirecTV's vice president for business development and research, told the New York Times. “It is an interesting kind of feature, but a DVR can do all that and more and provides more flexibility.”

The Yankee Group estimated that about 2.4 million homes in the United States now have some sort of digital video recorder. For its part, TiVo reports having about 703,000 customers, including DirecTV subscribers. (DirecTV offers a set-top box with an integrated digital video recorder that uses TiVo technology; EchoStar’s counterpart does not.)

Those figures suggest that there are about 1.7 million homes with a non-TiVo digital video recorder. EchoStar has about 750,000 to 800,000 such users.

Not to be outdone, cable companies are making a push in the same direction. Time Warner has deployed about 150,000 total boxes with digital video recorders built in, according to the Times, scattering them among 27 of the company’s 31 geographic markets. Comcast has not yet introduced boxes with such recorders except in test marketing, but intends to offer commercial service later this year.

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