Thursday, May 25, 2006

The Next Betamax Case?

An earlier posting discussed a proposed new service by Cablevision in which Cablevision will store on its servers programs that subscribers record. The issue has now been joined with a suit filed by the studios, as detailed in this story by Ben Fritz in today's Daily Variety:

Fox, Universal, Paramount, Disney, CBS, ABC and NBC have all joined forces in a lawsuit against the fifth-biggest cable operator over its controversial network digital video recorder.

Called remote-storage DVR, it gives subscribers the functionality of a TiVo but stores programs on Cablevision's own servers, rather than on a set-top box in users' homes, and streams shows that they choose to record to them.

It's the latter point that has studios and nets in a tizzy. They're alleging that by transmitting programs stored on its own servers, Cablevision is essentially creating a new on-demand service without paying licensing fees.

"While Cablevision apparently will call its service 'RS-DVR,' presumably to make it sound like a mere extension of digital video recording equipment, the proposed service is nothing of the kind," lawsuit claims. "Cablevision's proposed service is an unauthorized video-on-demand service that would undermine the video-on-demand, download, mobile device and other novel and traditional services that plaintiffs and other copyright owners have developed and are actively licensing into the marketplace."

RS-DVR is skedded to start a trial rollout in Long Island next month and eventually become available to all of Cablevision's 2 million digital subs. Suit will likely delay that rollout, however.

Cablevision first announced plans to offer the service in March. Many considered it controversial at the time and expected such a lawsuit to be filed (Daily Variety, March 27).

Studios have made overtures to the operator in the past two months, but it maintains no additional rights are needed since the new service is identical to TiVo, which is indisputably legal.

Many industryites privately grouse about consumers' existing ability to time-shift TV and skip commercials, though they have no legal recourse against DVRs in the home. But this lawsuit makes clear that studios and nets will fight any effort to extend such services beyond the current legal limits, even if consumers don't get additional functions.

To bolster Cablevision's case that its new service is no different than a TiVo, RS-DVR records separate copies of a show for each user as they request it. Subscribers get 45 hours of hard drive space and can record only two programs at a time. Set-top box-based DVRs record up to two shows at a time and typically record between 40 and 80 hours of TV.

RS-DVR is significantly cheaper for Cablevision than standard DVRs, which it must install, repair and replace at consumers' homes.

Time Warner Cable planned a similar service in 2003 called Maestro but abandoned it over copyright concerns and transformed it into the new Startover."This lawsuit is without merit, reflects a fundamental misunderstanding of Cablevision's remote-storage DVR, and ignores the enormous benefit and well-established right of viewers to time-shift television programming," Cablevision said in a statement.

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