Outlawing the DVR?

6:00 PM -- The research arm of Sanford C. Bernstein & Co. Inc. offers an interesting analysis that wonders whether a "strict interpretation" of a judge's ruling on the Cablevision Systems Corp. (NYSE: CVC) Remote-Storage Digital Video Recorder (RS-DVR) might imperil the legality of all traditional, set-top based DVRs. (See Inside Cablevision's 'RS-DVR' and Net DVR Still Appealing for Cablevision .)

As Judge Denny Chin found in his ruling of the RS-DVR, Cablevision breaches copyright because the operator owns, maintains, and provides permissions to the DVR… all for a monthly fee.

"Gulp. If that argument is correct, then set-top DVRs -- not just network DVRs -- would seem to us to potentially breach the copyright, too, especially in light of the Court's earlier comment that the legality of set-top DVRs is unresolved," write the report's authors, Craig Moffett and Michael W. Parker. "Programming owners could well pursue this interpretation through a separate action and arguably force MSOs and satellite operators to stop offering not just network DVR service, but any DVR service at all."

They also note that this is just their interpretation and that "it may go nowhere," echoing the hopes of cable and satellite operators far and wide.

It also may not go too far, to judge from the penetration of the traditional DVR: 17.2 percent of U.S. homes have a DVR, according to Nielsen Media Research

Consumers, Moffet and Parker point out, "love their DVRs" and "have tasted the joys of a commercial-free world and aren't going back to 1998."

They strengthen that point with a don't-feed-the-bears analogy, explaining that the poor beasts, once they get a taste for cold pizza and Doritos, "are unable to go back to their old diet."

Like those bears, DVR users "have already eaten the pizza," the authors insist.

— Jeff Baumgartner, Site Editor, Cable Digital News

Michael Harris 12/5/2012 | 3:09:14 PM
re: Outlawing the DVR? The Bernstein boys are spot on. Logically, the door should swing both ways on this issue. If STB DVR is OK, Net DVR should be too. If Net DVR is illegal, why is STB DVR OK?

As covered previously on LR CDN at http://www.lightreading.com/do...

"Our remote-storage DVR is the same as conventional DVRs, and merely enables consumers to exercise their well-established rights to time-shift television programming," said Tom Rutledge, Cablevision's chief operating officer, in a statement. "It does not alter the relationship between our customers and the programming they choose to record, and simply stores programming recorded by consumers in a central location...

"We continue to believe strongly that remote-storage DVR is permissible under current copyright law and offers significant benefits to consumers, including lower costs and faster deployment of this popular technology to our digital cable customers."

It's a darn reasonable argument. Really, what's the difference whether a consumer records and stores purchased cable TV programming on a hard drive they rent from their cable provider that's located in their home or that's located in the MSO's data center? In either case, the subscriber is simply archiving legally obtained video content on a hard disk provided by the MSO.
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