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Hollywood's movie studios and major television networks filed a lawsuit this week claiming copyright violations from Cablevision's planned remote-storage digital video recorder (DVR) service, demanding an injunction to ban the service.
Cablevision's plans, announced in March, are to store content aired on its cable network on company servers, and then allow customers to access the programming at their leisure with DVR functionality that includes pausing, rewinding and skipping through commercials.
Content giants 20th Century Fox, Universal Studios, Paramount, ABC, CBS and NBC argued in a court brief filed in New York that Cablevision's service amounts to copyright violation for copying, storing, rebroadcasting and profiting from the plaintiffs' content without proper authorization.
Rewind and Replay
The legal objection to the service is a replay of what happened to Time Warner (NYSE: TWX) a few years ago when it floated a similar idea, but was forced to scrap it, Yankee Group Director of Media and Entertainment Strategies Adi Kishore told the E-Commerce Times.
"That came up against the same thing," he said of the service, which was dubbed Maestro and was later re-tooled to only allow viewers to start a program over, but not to skip ahead.
Having witnessed Maestro's fate, Cablevision obviously believes that its service is legitimate in the same way a DVR is considered a legitimate use of content that does not violate copyright, Kishore said. Rights become much more difficult to define on a network, however, he pointed out, compared to a DVR set in viewers' homes.
"It's a pretty complex licensing network, and unless the rights are well-defined, it can be unclear what those rights are," he said.
Key for Cable
Despite Cablevision's contention that its service will function like a DVR and should be regulated as such, the content holders are arguing the service is an inappropriate use.
"It's a question for the lawyers at this point," Kishore said.
By buying storage for such a service in bulk, and charging customers the same price as DVR rental, the model could be lucrative to the cable operators. It also represents a key differentiator to satellite services, which could not deliver a similar service because the networks are not two-way, a requirement for the DVR control without an endpoint device, Kishore added.
Contracts and Courtrooms
Contrary to the studio and network contentions, programming contracts typically grant content networks such as Cablevision the rights required for the service, Envisioneering Group Research Director Richard Doherty told the E-Commerce Times.
"They don't rule this out," he said. "So this is an interpretation of existing contracts that may or may not stand the scrutiny of Cablevision turning the lights on."
Cablevision, which has the "tacit" support of cable cohorts Comcast (Nasdaq: CMCSK) and Time Warner, knew there would be a challenge to the service, according to Doherty, who said the lawsuit may still impact the business model.
"You can never underestimate the ability of lawyers to tie up a business possibility," he said.
Convenience Is King
Doherty questioned how the studios, which might not all be opposed to the Cablevision service, and TV networks, could challenge the plan when most are dabbling with similar services themselves, including NBC's programming via Apple's (Nasdaq: AAPL) iTunes service, or CBS offering its shows essentially when users want it through a deal 
with Yahoo (Nasdaq: YHOO).
He also said the proposed Cablevision service would be welcomed by users who would no longer have to worry about the failed hard drives or other issues of DVR devices in their homes.
"It really is a matter of user convenience," he said.
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