Despite the fact that satellite TV providers adopted the DVR technology earlier and more vigorously, cable TV providers are increasingly using the device as a successful weapon against satellite TV, according to the Wall Street Journal on Monday.

In a study released by The Carmel Group, a Northern California consulting firm, it was found that the promotion of and broad acceptance of DVRs by Cable customers is an important new trend.

"The development could put the nation’s satellite-broadcasters, which originally championed the use of DVRs, at a disadvantage as cable operators capitalize on their size and marketing prowess to adopt and push the same technology for their own purposes, according to the report," wrote the WSJ’s Andy Pasztor. The report notes that this is a remarkable turnaround for the cable TV industry.

The consulting firm has tracked the use of DVRs closely since the late 1990s. They have strong ties to the satellite TV industry, and that suggests a less biased finding than they would otherwise have.

Mr. Jimmy Schaeffler, the consulting firm’s chairman, said "this is the first time we’ve noticed this turnaround" in DVR usage." Satellite broadcasters "got into DVR technology early, tried to hold the high ground," but after six or seven years are now steadily being overtaken in this arena by cable rivals, he said. "The bottom line," according to Mr. Schaeffler, "is that this is not a good trend" for satellite broadcasters.

An important business change has been at play. Previously, U.S. cable TV companies were reluctant to promote DVR technology because they couldn’t adequately enforce DRM. In 2001, only one of ten major cable companies planned to include DVRs in their business models. Today, however, they have completely turned around and are using the DVR technology successfully as a way to retain their customers. The report said, [the change in direction] "cable has orchestrated during the past five years has been somewhat remarkable."

About 28 percent of cable TV customers have DVR systems. That number is expected to reach 50 percent by 2010, and satellite TV numbers, while unspecified, don’t look as good.

In addition, the cable companies have used video-on-demand to their advantage. " ...the latest projections suggest that DVRs instead could end up providing a significant boost for resurgent cable systems, particularly if the devices eventually are marketed in conjunction with burgeoning video-on-demand systems," according to the WSJ.

Part of the reason for cable TV’s success, as iPO has previously reported, may be that the largest satellite TV provider, DirecTV, elected to forsake the TiVo relationship and build its own DVR, the HR20, which has received very poor reviews. DirecTV customers had to buy that rather expensive unit and many users have been unhappy with it -- while cable TV customers could rent a unit, something that took some of the sting out of occasionally buggy cable company DVRs. Also, cable TV users have been able to purchase a TiVo and use Cable Cards, albeit with occasional installation rough spots. Satellite TV customers cannot normally use a TiVo effectively for unattended recordings because there is no mechanism to externally change channels on the latest DirecTV set top boxes.

The DVR offered by Dish Network has received good reviews.

Even though satellite TV has been strongly promoting many new HD channels, the Carmel Group report reveals that cable companies are countering strongly with leased DVRs and VOD choices that have proven attractive and helped to retain customers.