Court Hands Cablevision Competitive Edge
08/15/08 - 07:01 AM EDT
Robert Holmes
With a victory in a recent court case regarding remote-storage digital video recorders, Cablevision (CVC Quote - Cramer on CVC - Stock Picks) was handed a crucial win that will change the competitive landscape between cable operators and satellite television providers.
The ruling by the U.S. Second Circuit Court of Appeals clears the way for it to proceed with its plans for remote-storage digital video recorder service, or RS-DVR. In essence, the new service allows customers to store recorded television programming on servers located at Cablevision's facilities, as opposed to recording to a hard-drive within the customers' own set-top box, as current digital video recorders do. Analysts say the court's decision is a huge win for cable operators, as capital spending will be reduced once a full RS-DVR system is rolled out and the more expensive DVR-specific boxes are replaced. Currently, digital-video subscribers must obtain a new set-top box that is capable of DVR functions. A transition to a full RS-DVR system will also be a boon for Cablevision and other cable providers, as it will help them ramp up penetration rates of digital video services in U.S. households while encouraging ad-skipping. Those factors will weigh heavily on both satellite television and media companies, which will be at a serious disadvantage by an RS-DVR rollout. While News Corp.(NWS Quote - Cramer on NWS - Stock Picks) and Disney(DIS Quote - Cramer on DIS - Stock Picks) weren't immediately available for comment on whether they will appeal the decision, Sanford Bernstein analyst Craig Moffett says that such an important case will likely reach the Supreme Court, which will have the task of deciding whether DVRs, in general, infringe on copyrights.
RSS
