Will network DVR have its day?

Last week's court ruling supporting Cablevision's use of a network-based, remote-storage digital video recording service (N-DVR to some, RS-DVR to others) could help usher in a new age of advanced TV services from cable TV firms and telcos. How quickly that age begins depends in part on whether or not TV studios appeal the decision, and also on how efficiently the service providers can resolve other issues related to N-DVRs.

The ruling by the U.S. Court of Appeals for the Second Circuit was a reversal of a lower court judgment in a case brought by several Hollywood TV and content firms opposed to Cablevision storing copyrighted content on its network without securing the content rights. Cablevision successfully argued that, despite the network-based storage, the customer is in full control of the recording service. Customers essentially make their own copies and put them into a virtual media cabinet on cable TV company property--which is essentially what people have done with VCRs since the 1980s.

It is not clear yet when Cablevision might resume its RS-DVR service trial, which it was pursuing when the lawsuit first halted its progress about two years ago. But, within the last two years, many other service providers have become interested in this idea and other similar ways they might add value to their TV services in an increasingly competitive market. Expect last week's ruling to have ripple effects industry-wide. It also seems to cast doubt on the potential success of RS-DVR services as a differentiator--it's not much of a differentiator if everyone has it.

Time Warner Cable already offers a similar service--Start Over--that avoided Hollywood's wrath because TWC secured rights for content storage. Comcast and others are planning similar services. TWC also soothed the advertising market by excluding features that would have allowed Start Over customers to skip commercials contained in stored content. As other service providers contemplate such services, it remains unclear how they might address the advertising issue. Giving consumers the ability to skip ads on your service when they can't do that on others could be a differentiator, but one that also creates significant controversy. Pricing also remains a variable.

Meanwhile, telcos deploying IPTV services also have started to push into whole-home DVR service. Some of them see such a service as an edge against cable TV capabilities whether or not RS-DVR services become a commercial reality. Will the possible legalization of network-based storage change their approach to whole-home DVR in any way? If they consider how to integrate the two service capabilities, could they lose valuable market time in the process?

Hollywood's lawyers may still have more of a say on all these issues than anyone else in the weeks to come.

-Dan

Related articles:
Cablevision won its RS-DVR appeal last week. Cablevision report
Ruckus Wireless has whole-home DVR in mind. Ruckus report

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