Sunday, May 28, 2006

Cablevision Sued For DVR-like service

Cablevision was recently sued for copyright infringement by the major studios and networks for copyright infringement. It seems that the roll-out of their new $10 a month DVR-like service has made the content owners nervous. Essentially, Cablevision is using their set-top-box VOD technolofy to allow subscribers to store their content on an offsite 80 gig hard drive, and allow them to stream their shows whenever they want and however they want...much like a DVR.

The Studios and Networks are crying foul, saying that this is VOD with some fancy work-around to prevent them from getting their share of the $10 monthly subscription fee. Cablevision is saying that it is exactly like a DVR with an off-site storage component.

Cablevision allows the susbcriber to store the content on a partitioned server, and does not control, store, access or distribute the content...they provide server space. Is it infringement? My assessment is no, but of course its our job to argue both sides. What do you think?


At 12:07 AM, Blogger don d said...

Our first impulse must be to protect the content owner.

Cablevision is trying to end-run existing contracts by exploiting the fuzzy gray area introduced by a remotely-hosted DVR service. This makes sense from the POV of a panicky cable operator trying to recapture the fat margins of the last decade, but it’s extremely short-sighted.

Sure, the litigants will find "pro-consumer" arguments for both sides of the DVR debate but, ironically, Cablevision’s approach will only accelerate the commoditization of bandwidth-to-the-home and erode cable’s claim of being the superior platform for delivering premium content. If anything, this strategy portends the death of cable as the preferred medium for quality (high-margin) home entertainment and its descent into just another cheap, dumb pipe.

If the cable guys continue to ignore the content owner's legitimate concerns, the content guys will fight back in a thousand little ways. There will be no victors in this battle -- just walking wounded. And the end result will be a bits-per-second price war between the cable utility and the telco utility -- and we all know who wins that one.

At 5:30 PM, Blogger David Michail said...

Don D...I agree, it makes no business sense, since they are all bedmates. But from a purely legal standpoint, I think that Cablevision has a plausible defense. Needless to say I see that Cablevision has since counterclaimed against content owners, so its starting to look ugly. But what I have noticed is how Time Warner responded in the media indicating that if the consumers want it this way, they will go this way...meaning that Cablevision is the guinea pig, and the other cable operators will soon follow if the consumers bite. If that's the case, then Content owners face a significant problem against cable, unless they can find a way to collectively fight them without violating anti-trust laws.

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