• by Joe Mandese  @mp_joemandese, March 21, 2006

A week after Nielsen Media Research disclosed digital video recorder penetration estimates that were higher than previously thought, a top Madison Avenue player has done the same. Interpublic media buying giant Magna Global USA this morning released an update in its "On Demand Quarterly" series indicating that DVRs are now present in 11.7 percent of U.S. TV households, up from 10.4 percent in the fourth quarter of 2005.

That represents an upward revision from Magna's last report, which estimated DVR penetration was only 8.8 percent as of the third quarter of 2005. It also revised its long-term forecast up to 34.4 million DVR subscribers by 2010, from an earlier estimate of 33 million that year.

Last week, Nielsen told attendees at its national client meetings in Orlando that it had revised its current DVR penetration estimate to 10 percent of U.S. households, from 8 percent previously. Nielsen also projected that DVRs would be available in 18 percent of U.S. homes by the end of the year.

Magna Vice President-Director of Industry Analysis Brian Wieser cited three factors for the revised outlook, which also includes revised outlooks for video-on-demand penetration:

* AT&T's and Verizon's "slightly more aggressive stance in deploying DVRs compared to cable operators."
* 100 percent availability of VOD to telephone company video subscribers.
* The shifting mix of subscribers among cable, satellite and telephone companies.

Regarding VOD, Magna now expects that function to be available to 66 million households by 2010, either via cable, satellite or telephone- based service providers.

Despite "the recent torrent of news associated with the distribution of on-demand content through cable and satellite providers," Wieser said Magna believes the industry still is "in the early days" of the new, nonlinear TV business model.

"Further availability of content through conventional television sets will continue to depend upon content packagers, distributors, and advertisers working together to move the medium forward. The following section of this report includes an analysis of business model elements required to sustain advertising in the on-demand world."