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