Cablevision delays service amid tussle
It’s networks one, cable operators zero in the battle over remote recording.
With a lengthy legal fight ahead of it, Cablevision on Thursday shelved its plans to test its remote-storage DVR until at least the next stage of the lawsuit.
Move came as a surprise to many cable-biz insiders, who had watched Cablevision send out trial balloons for more than a year and thought the company would dig in its heels.
Service now won’t be piloted until, at the earliest, November, after a hearing on the lawsuit takes place on Oct. 30.
The cable operator had originally planned on a rollout this month in a small number of homes in a prime area of its footprint: the Gotham suburbs of Long Island. After making an announcement to much fanfare several months ago, the company must now explain to customers that they could be in for a long delay.
System, also known as network DVR, allows users to stream shows from servers hosted centrally at Cablevision, effectively giving customers the power of TiVo but the convenience of on-demand.
But a consortium of content providers that include studios like Universal and Disney and many of the major networks sued the operator last month in the first major battle on the new frontier of digital recording.
Plaintiffs say Cablevision has created a de facto on-demand service without their permission. Cabler argues that where the actual data is stored is a moot point, especially since separate copies are made for each user.
Announcement of a delay comes one day after Cablevision met with the plaintiffs, defended its service before a judge in New York District Court on fair-use grounds and filed a countersuit against the nets and studios.
Cablevision likely could have kept its service going, legal experts say, but may have gotten bogged down in what would have been a separate fight over an injunction that could have ultimately delayed the service further. A Cablevision spokesman did not return a call seeking comment on the delay.
That delay reps an unmitigated win for the networks and studios. It gives them a much-needed reprieve that could allow them to negotiate with operators and also robs Cablevision of a body of evidence that could have been used to convince a judge of the existence of customer demand — or make an argument to the nets about potential benefits of the service.
Networks have taken a double-edged strategy on digital recording: fight its proliferation on the one hand but seek increased coin from advertisers on the other. The nets dropped a round in their fight against advertisers earlier in the week when ABC agreed not to take DVR customers into account in their ad rates, a system known as live-plus.
Ironically, if nets do allow Cablevision’s service to go forward and ratings in fact drop, it could bolster their case to advertisers for live-plus.
Experts say the suit will take up a philosophical question — where does a DVR end and an on-demand service begin — that has major practical implications.
Suit will be watched closely by Time Warner Cable, Comcast and other multisystem operators, who would quickly jump in if Cablevision triumphed or even settled.
Comcast’s Brian Roberts has expressed a desire to bring principles of the Web and search engines to the set-top. Time Warner, meanwhile, has quietly tested in South Carolina a program called Startover, which at the moment allows viewers to restart programs already in progress but which insiders say could easily be expanded.
Larger struggle is over how widespread time-shifting can become. Experts say it’s about more than ad revenue but about the desire to control consumption and schedules. If television moves to an Internet, on-demand model, network execs fear traditional tools, like lead-in and cross-promotion, as well as higher ad rates for primetime, could evaporate.
But the suit also creates some paradoxes. After arguing with affiliates in favor of customer demand on new platforms like iTunes, nets are in the odd position of arguing against it here.
“Networks know they’re not going to be able to put the genie back in the bottle,” said tech and media expert Laura Behrens, a consultant with the Gartner Group. “But they do want some influence over the genie.”