Cablevision to launch controversial remote DVR

Despite possible legal challenges, Cablevision is moving ahead with plans to deploy its Remote Storage-DVR this summer, a service that allows cable TV subscribers to record shows on Cablevision servers rather than on a home DVR. The news comes from Bernstein Research senior analyst Craig Moffett, who got the scoop from Cablevision executives this week.

On the past few years, Cablevision, which provides cable service in parts of New York, New Jersey, and Connecticut, has faced legal challenges from major programmers, who claim network DVR service violates their copyrights.

In 2006, a powerful group of media conglomerates, including ABC, NBC, CBS, and Fox, sued Cablevision and succeeded in blocking RS-DVR's implementation. But last summer a U.S. appellate court ruling overturned a lower court decision, thereby giving Cablevision the green light to proceed-at least for now. Some industry watchers believe the case will ultimately be decided by the U.S. Supreme Court, which hasn't yet decided whether to hear the case.

"The law of the land in our area is that network DVRs are legal. We have won a case versus the copyright holders. We'll be rolling out our first product based on that later this summer. We'll move to centralized storage," Cablevision chief operating officer Tom Rutledge told Bernstein Research.

Remote DVR is a good news-bad news scenario for consumers. The good news is convenience. It's a lot easier to record shows on the cable company's servers. There's no physical DVR to fuss with, and you don't have to return a malfunctioning unit to the company. And if you need more storage-my 80GB DVR is filling up fast-upgrades are a whole lot simpler.

The down side? Network DVR service could very well nix features that subscribers love the most, such as the ability to zip past commercials. TV networks hate commercial-skipping viewers for obvious reasons, and Cablevision says RS-DVR could eliminate that feature.

"I think ultimately we'll end up in some commercial arrangement with programmers. We're having discussions with the copyright holders that can make the network DVR model work in their best interests. If they allow physical DVRs to proliferate, it takes it out of their control. If they do it centrally, they could control ad-skipping, measurement, and the timeliness of advertisements, would clearly be in the interests of the programmers," Rutledge said.

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