Cablevision’s Remote DVR Service Gets Appeals Court Victory; Implications ‘Seismic’: Analyst

Cable operator Cablevision (NYSE: CVC) has won a court victory in its bid to offer a hosted DVR-type service. Last year, a district judge ruled in favor of plaintiff Cartoon Network that such a service constituted a form of copyright infringement, since it involved Cablevision copying the content. Now the 2nd Circuit of the U.S. Court of Appeals has reversed that ruling, saying the service, called Remote Storage Digital Video Recorder (RS-DVR), is not a problem and that it’s functionally the same as providing a physical DVR. The case was remanded back to the lower court for further action. Though none had yet tried offering similar services, other cable operators had voiced support for Cablevision’s position. Multichannel News notes that the immediate effect of this ruling will be that legacy subscribers will be able to get DVR services through their old set-top boxes.

In a note quickly churned out by Bernstein analyst Craig Moffett, the ruling is said to have “seismic implications” across the media landscape. The key points, cable operators will now be able to deliver these services with much lower capex. And Moffett anticipates a spike in DVR usage, exacerbating the negative effects of commercial skipping on the networks’ bottom lines. Local broadcasters will be the hardest hit. Additionally, this is a win for cable operators over satellite operators, since the latter are unable to deliver the same service due to the nature of the infrastructure. All that being said, this could go all the way to the U.S. Supreme Court before it’s officially decided.

Said Cablevision COO Tom Rutledge in a statement: “This is a tremendous victory for consumers, which will allow us to make DVRs available to many more people, faster and less expensively than would otherwise be possible… We appreciate the Court’s perspective that, from the standpoint of existing copyright law, remote-storage DVRs are the same as the traditional DVRq that are in use today,” he said.” (via Reuters)

The full decision can be read after the jump…

Some key points can be found on pages 25-41. The main gist is that this does not constitute public performance of copyrighted work, since each “copied” TV program can only be seen by the one user that does the copying. And, in that sense, according to the judge, Cablevision is acting like a Kinkos that provides copiers for the public to use, rather than a shadier copyshop making copies of copyrighted textbooks and then selling them to professors.:

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