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Is There Still a Need for Network DVRs?

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The Supreme Court decided yesterday that it was not going to hear the case of Cablevision (s CVC) vs. the Hollywood networks and studios over remote storage DVRs. Instead, the high court asked the Justice Department to weigh in on whether Cablevision’s proposed centralized video recording service would violate copyright law. Translation: It’ll be months before a decision is made. But does the question even matter any more?

We continue to scratch our heads over why Hollywood is so opposed to the notion of a cable company centrally hosting a subscriber’s DVR; it seems like a win-win-win situation. Cable subscribers would have one less box in the home and get more storage, cable companies could save money by not distributing boxes to every home, and content owners could better control their content and dynamically change ads within recorded shows.

But as usual, by the time this legal bickering concludes (the case has already been going on for three years), technology will be close to leapfrogging the mess entirely. As we saw at last week’s CES, TVs jacking in and receiving content directly over the Internet is the new black. Netflix (s NFLX), Amazon (s AMZN) VOD and YouTube (s GOOG) are coming to your big-screen TV. Since these services stream content (in HD, no less) there’s no need to record them — users just pluck them out of the video cloud.

Granted, these services still need to work on the amount of content offered and the release windows, but they’re getting better. Which is more than I can say about the prospects for a remote storage DVR.

4 Responses to “Is There Still a Need for Network DVRs?”

  1. A few thoughts.

    Network DVRs are really just another name for VOD. RIght now all programmers control what shows are offered for VOD and where, and they usually get some direct benefit from making their programming available that way. These benefits may include additional fees from cable companies, additional ad revenue from VOD-specific ads and opportunities for exclusive placement (FOX shows only on and Hulu, for example.)

    If cable operators can turn every linear feed into a VOD service, all of those benefits go away. And of course, satellite providers don’t presently have the technology to do the same, so it would give cable a huge advantage.

    I don’t have any numbers handy but I don’t think DVR penetration is that big yet. Essentially doubling or tripling the number of DVR-using households through a network DVR service would dramatically increase commercial networks problems with ad skipping and time shifting. The Nielsen overnights would be useless.

    It’s only a matter of time before this becomes the reality anyway, but I think programmers are eager to do whatever they can to delay it so they can squeeze every last cent out of their current business model.

    We as viewers benefit from some kind of everything-in-one-place VOD service that connects seamlessly to our TVs. It ultimately doesn’t matter if that’s via the cable company, a website, a subscription service (like Rhapsody is for music) or something else. We’ll eventually get there, though some current players will be dragged kicking and screaming – and others may find themselves out of business entirely.

  2. Time Warner recently began offering a Start Over feature on several channels in Manhattan. It’s very cool to be able to watch a show from the beginning, even if you’ve tuned in at the very last minute.

    Unfortunately, the don’t allow fast forward or rewind, so the novelty quickly wears off.