Video services

YouTube Rains on Cloud DVR Parade

Recording a piece of content didn't used to be so hard. Yes, the quality when you hit record on EP mode with your VHS tape was less than stellar (Millennials, see: VHS on Wikipedia), but at least you knew you'd be able to watch your favorite program and fast forward through all of the commercial breaks.

And then came digital video recorders. Holy 30-second skip, Batman!

But somewhere en route to cloud DVR, something went wrong. In the latest example of said downward trend, YouTube Inc. is reportedly cutting off access to commercial fast-forwarding for several programs as part of the cloud DVR feature in its new YouTube TV service. According to The Wall Street Journal, users are able to skip through ads in recorded shows, but only if those shows are not also available on-demand. When a show is available on-demand, users will default to that version of a program rather than the one they recorded. No ad-skipping allowed. (See also YouTube TV Is Here... in 5 Markets.)

The YouTube debacle highlights the ongoing rights issues around streaming and recording content. Slowly, pay-TV operators are re-negotiating long-term contracts to include streaming retransmission rights in addition to traditional broadcast. But even where streaming rights are granted, programmers are still loath to enable DVR functions that cut into advertising revenue, as evidenced by YouTube TV.

Before over-the-top content took off, the pay-TV industry found a compromise legal solution in the Remote Storage DVR (RS-DVR) approach. RS-DVR allows distributors to store recorded content in the cloud, but each recording by an individual has to be stored as a discrete asset. There are no shared copies of program, meaning that distributors are stuck with devoting resources to storing and transmitting duplicate copies any time a recorded program is requested. That's turned the programming rights issue into a major technology challenge.

Even for Comcast Corp. (Nasdaq: CMCSA, CMCSK), the largest cable company on the planet, storing individual copies of a program is a resource strain. As distinguished engineer Neill Kipp explained recently, Comcast has racked up 640 petabytes of total storage for its cloud DVR service, a process that took more than a year to complete. And distribution isn't ideal either. By law Comcast can't cache copies of a program in its content delivery network (CDN). Every copy has to be passed directly through to a subscriber. (See IP Video Not Yet a Slam-Dunk for Cable.)

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Even when there are solutions to the legal and technical issues of video recording, pay-TV providers that want to offer cloud DVR service online still have to work through negotiations with their programming partners. Comcast has huge clout to negotiate streaming and recording contract terms. Smaller companies, less so. And for a company like YouTube that wants to keep prices down for consumers, there's presumably a correlation between what YouTube is willing to pay programmers and what feature benefits it's able to secure. In other words, if YouTube paid programmers gobs more money, they might be willing to relax their cloud DVR restrictions, but then YouTube TV wouldn't cost just $35 per month.

There are plenty of incentives for pay-TV providers to get cloud DVR right, and many are working very hard to do so. Dish Network LLC (Nasdaq: DISH) introduced its Sling TV cloud DVR service in beta on Amazon devices a month ago and has now extended access to Roku and Android devices, with more integrations on the way. But even with Sling TV, the cloud DVR feature isn't available for all channels -- a casualty of contract negotiations without a doubt.

Ultimately, the tipping point for cloud DVR will have to come as a result of consumer pressure. The more consumers demand it, the more service providers will find a way to offer it... and without all of the caveats currently in place. But cloud DVR won't come easy, and it won't come cheap.

— Mari Silbey, Senior Editor, Cable/Video, Light Reading

kq4ym 4/27/2017 | 5:15:07 PM
Re: Wait, what? I don't see myself going for the YouTube service but with their huge roll of possible subscribers they should be able to get some extra cash flowing with it. It's still a trade off for low cost and mandated ads or higher cost and ad free.
Mitch Wagner 4/11/2017 | 4:20:06 PM
Wait, what? Remote-Storage DVR? Clearly I missed a chapter. Wasn't that the technology behind Aereo, ruled illegal?

$35/mo. is a lot for a single streaming service, particularly if you can't skip commercials.
msilbey 4/11/2017 | 3:33:57 PM
Sling TV Cloud DVR exceptions Sling TV's Cloud DVR service is pretty complete, but it is missing Disney-owned channels, and a few others.

From Dish PR:

Cloud DVR functionality is currently available for all live content, except on the following channels:
  • All Disney and ESPN channels
    • This includes ABC, Freeform, Disney Channel, Disney XD, Disney JR, ESPN, ESPN2, ESPN 3, ESPN Deportes, ESPN Goal Line, ESPN Buzzer Beater, ESPN Bases Loaded and the SEC Network.
  • FOX local networks, FOX Sports 1 (FS1), Nat Geo, and FX
  • On-demand only channels, including Newsy, Local Now, Maker and Polaris by Maker
msilbey 4/11/2017 | 3:32:44 PM
Re: From my cold dead hands Agreed. Much like Hulu launched a more expensive commercial-free version of its service.
wkm001 4/11/2017 | 2:46:00 PM
From my cold dead hands I built my own CableCard DVR. Eventually Windows 7 or the CableCard will no longer be supported. I have no idea what I will do then. I know what I won't be doing, watching commercials. If a service requires I watch commercials they can shove it.

It must cost more to get the cloud DVR restritions relaxed than to build an enormous data center. By at least a factor of ten. Just like Verizon eventually came back to unlimited, someone will eventually offer a tv service that doesn't have ads. It will cost more obviously.
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