Dell’Oro Group reports that the number of DVR-equipped, pay-TV set-top box unit shipments contracted 20 percent year-over-year in the first quarter this year and accounted for one-third of the total set-top box shipped during the quarter.

This contraction in the first quarter may be attributed to several factors. “First, the economy is reducing the demand for premium services such as DVR functionality,” said Greg Collins, Vice President at Dell’Oro Group. “Second, growth in the set-top box market is coming from Europe and developing regions where DVR functionality is still new and not yet embraced by consumers. Third, multi-room DVR’s are at the very early stages of impacting demand for integrated DVR’s. Multi-room DVR’s offer end-users greater functionality and ease of use by eliminating the need to manage content on multiple set-top boxes. Furthermore, since the hard drive is often the most expensive and most failure-prone component of a set-top box, multi-room DVR’s also offer service providers lower capital and support costs,” he finished.

The IP STB market was the only segment to grow year-over-year in the first quarter with Motorola and Cisco holding top spots. ZTE captured the third position with strong sales of inexpensive, standard definition products to China where IPTV is starting to gain momentum.