Chuck Dolan’s Cablevision has filed an appeal after a federal court ruled last week that the major studios could stop the cabler from harvesting a monetary windfall by altering its DVR service to digital customers.
The court said Cablevision was violating the copyright of TV shows and movies owned by Fox, NBC Universal, CBS Paramount, Disney/ABC and Time Warner, the plaintiffs to the original lawsuit filed last spring.
The studios argue that Cablevision should not be permitted to transmit shows to customers’ TV sets from a remote central location, thus bypassing individual set-top boxes; Cablevision maintains that the remote-storage DVR is not appreciably different from storing TV shows on the hard drives of individual set-top boxes.
Utilizing a remote central location provides enormous cost savings to the cable operator, doing away with the cost of buying millions of set-top boxes and installing them in subscribers’ homes.
Remote-storage DVR “is permissible under current copyright law,” said Tom Rutledge, chief operating officer of Cablevision, in a statement. He said this DVR technology offers “significant benefits to consumers, including lower costs and faster deployment … to our digital-cable customers.”
But the studios are opposed to remote-storage DVR because the streaming of programming from the remote central location to subscriber TVs represents, they say, a form of on-demand programming.
That’s important because cable operators pay a license fee to the studios to get VOD rights; Cablevision is not paying any separate fees to put the same programming on the remote-storage DVR.
The studios know that if the court rules in Cablevision’s favor, all other cable operators will follow suit, which could put a severe dent in the VOD business and strip the studios of potentially meaningful revenues.