Video services

Satellite No Match for RS-DVR?

11:00 AM -- The U.S. Solicitor General's recommendation that the Supreme Court not review the Cablevision Systems Corp. (NYSE: CVC) Remote Storage-DVR (RS-DVR) case is a clear setback for programmers, but it might also represent some disturbing news for satellite TV operators, says one industry analyst. (See DoJ: Butt Out of Cablevision RS-DVR Case .)

If other MSOs follow suit with iterations of RS-DVRs of their own, they'll gain a "huge differentiator" against the likes of DirecTV Group Inc. (NYSE: DTV) and Dish Network LLC (Nasdaq: DISH), which both lack the same kind of return path cable's blessed with. Time Warner Cable Inc. (NYSE: TWC), which is already headed down the network DVR path with "Start Over," is one of the MSOs that has shown interest in the RS-DVR approach. (See Time Warner Cable Eyeing Network DVR Case .)

"Because network-DVR functionally is an inherently point-to-point technology, the satellite operators – who operate exclusively point-to-multipoint archirectures – simply cannot match cable's Network DVR capability," Sanford analyst Craig Moffett offers in a research note issued Monday morning.

Instead, the satcos, he points out, are "consigned to the capital intensive model" of deploying a local DVR on every TV or going with a whole-home DVR configuration, he adds. Dish and DirecTV, by the way, do offer a limited form of video-on-demand using DVR receivers/set-tops with high-speed Internet connections and tapping a portion of those hard drives to store movies.

Cablevision, in comparison, can turn any of its interactive cable boxes into a DVR with the MSO's cloud-based video storage and playback system, which is expected to launch sometime this summer.

As an added benefit, the RS-DVR should lower capital spending, because a local hard drive is not required. According to Moffett, cable boxes with onboard DVRs have accounted for 10 to 15 percent of all capital spending among the major MSOs.

But Cablevision's RS-DVR foray isn't without some technical challenges. Be on the lookout for a story from us that outlines what those are, and which specific challenge will likely outweigh the others.

— Jeff Baumgartner, Site Editor, Cable Digital News

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