Digital Video Recorders: Starting a TV Revolution?

In 1999, TiVo and Replay Networks introduced the first digital video recorders (DVR) to replace the video cassette recorder (VCR) and move television viewing into the digital age. Experts predicted fast household adoption based on the excitement the DVR had created in pre-launch market research. Almost a decade later, the promised DVR revolution is still waiting to happen. In constrast, the much more mundane DVD player and Netflix, launched at the same time, have shown more promising growth rates. What went wrong for the DVR?

The case illustrates the challenges a firm faces when launching a really new technology and creating a new product category. Great functionality is insufficient for fast adoption. The customer must understand what the innovation is, and how and when to use it. Moreover, the disadvantages compared to existing technology and the required behavior changes must be limited. A strong marketing effort that guides customers through the adoption journey is needed to overcome these hurdles.