September 25, 2008

Cable Ponders DVR Shift

If the nation's largest cable TV operators have their way, the home digital video recorder could soon become a relic. Leading the way is Cablevision Systems Corp., which plans to roll out a system early next year that will let viewers record any show without a DVR, only a digital set-top box. Shows will be stored on Cablevision's servers - a shift the company said could save it upward of $700 million.

DVR boxes cost as much as $400 for high-definition, and it can take years to recoup that cost with monthly fees, said Craig Moffett, senior analyst at Sanford Bernstein.

Philadelphia-based Comcast Corp., Time Warner Cable Inc. of New York and Charter Communications Inc. in St. Louis also are interested in deploying network DVR - as the technology is known - but are further from implementation. The four companies serve 70 percent of U.S. cable subscribers.

In spite of the savings, network DVR has some problems.

Time Warner pointed to the legal cloud surrounding it. The Motion Picture Association of America has said it is "considering all legal options" after losing an appeal of its two-year-old copyright- infringement challenge of Cablevision's plan.

Cablevision executive Tom Rutledge is unfazed.

"We did win our case, and the law of the land right now is that our network DVR is lawful," he said in an interview. "So we want to use it. Simple."

But Cablevision must tread carefully not to undermine the winning argument it made: that its network DVR essentially acts like a home DVR.

Subscribers will have to initiate the recording of shows, not Cablevision; and the stored programs will have to be unique to each viewer and not set aside for all subscribers. Consumers who sign up for the recording service would simply choose programs to record and play from a new DVR screen using a new remote provided by Cablevision.

Originally published by The Associated Press.

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