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Tuesday, April 10, 2007


Cablevision appeals network DVR ruling

Cablevision appealed a case recently that prohibited the company from rolling out their next-generation digital video recorder in NY. The new recorder would dramatically increase the rate at which the company could distribute DVR capabilities. Essentially, the new system would allow any household with a cable box to record their favorite show and play it on their computer later. The system would allow any cable subscriber access to DVR technology without expensive equipment installations. The Hollywood studios that successfully sued Cablevision claimed that they filed the suit in order to prevent additional broadcasts of their programs. However, the real reason probably lies in the fact that DVR owners can fast forward through commercials when watching their recorded programs. Obviously, if subscribers can fast forward through commercials then the companies that buy spots during shows will be less inclined to spend top dollar on commercials that people aren’t going to watch. Hollywood studios would lose money and therefore are probably trying to protect their pockets.

Legally, Cablevision should be able to rollout their new product without any interference from the New York government. That is, NY should not be able to prohibit the production and selling of any product. The only question is whether the new recorder violates the liberties of any specific person or group. For the most part, I think not. I believe that 99% of the people who use the system will just be watching the shows that they missed or re-watching the shows that they enjoyed the most. However, since the new system would allow people to put the programs on their computer, there is a significant probability that the television shows could end up on a website (You-Tube?). Again though, this is not the major concern for Hollywood studios. They don’t make their profits from individual consumers. Rather, they make their billions from the companies who buy commercial time. So, while the case and the ruling seem correct, there seems to be a case of rent-seeking involved. Either way, I think that the courts decided correctly in protecting the television studios that could possibly go out of business if a system like that was provided to such a large number of consumers.

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