Great news for Cablevision (CVC) and the rest of the cable industry: Hosted DVR services — which allow cable companies to create “virtual” Tivos that live in a datacenter somewhere, not on a hard drive in your living room — are legally sound.
Specifically, network-based DVRs “would not directly infringe plaintiffs’ exclusive rights to reproduce and publicly perform their copyrighted works,” says the U.S Court of Appeals for the Second Circuit in New York, reversing a lower court ruling. (See full ruling, embedded below, via Guardian Media Group.)
This is good news for cable subscribers and cable providers: By moving the recording function to a central datacenter, subscribers will be able to sign up for DVR service using older and/or cheaper set-top boxes — a potentially significant relief to capex.
On the other hand, it’s bad news for set-top box giants like Motorola (MOT) and Cisco Systems (CSCO), which have benefited as cable subscribers have upgraded to hi-def boxes with built-in DVRs.
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