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Cable Operators

Digital Recording Comes Out of the Box

3/24/2006 7:06 PM Eastern

Cablevision Systems Corp. is launching a groundbreaking technical trial today (March 27), in which its subscribers will record TV shows and movies on servers in its network, rather than on the set-top box in their homes.

By shifting the recording to storage devices in its equipment headends, Cablevision will not have to invest in set-top boxes with hard drives in them for customers who want to record programs. Instead, every digital set-top box automatically becomes a digital recorder.

NO TRUCK ROLLS

The Bethpage, N.Y.-based operator also will never have to send out an installer in a truck to set up, fix or replace recording equipment in customer homes. And, eventually, it will be able to insert different ads for different viewers into recorded programs, each time they are played back.

The trial is taking place in Cablevision's home base of Long Island, N.Y. Subscribers in fewer than 1,000 households will be given the chance to store 80 Gigabytes of data, or about 25 hours of programming, on Cablevision servers. The service will be free to the participants.

“Given the enormous popularity of digital video recorders, and the expense associated with purchasing and deploying conventional DVR devices, we believe we've developed a smarter and more elegant approach that can be replicated by other cable operators and benefit cable customers across the nation,” said Cablevision chief operating officer Tom Rutledge.

If all goes well, Cablevision, which serves 3 million subscribers all told, plans a broader rollout of the service later this year. In the commercial rollout, customers will be charged a monthly fee for storing and playing back the programs they record.

Programming networks could object to what they might consider unauthorized copying by the cable companies of their copyrighted works. A somewhat similar service called Mystro was developed earlier in this decade by Time Warner Cable, which planned to store a week's worth of all programs that appeared on its systems, for play back by viewers.

But Time Warner Cable executives were never able to get permission from programmers to record and store their content on Time Warner Cable servers. Programmers said the existing affiliation agreements did not allow for such recording and storage

But Cablevision, the nation's sixth-largest cable-systems operator, believes its recording service is on safe legal ground, since the user is initiating the copying, not the company.

LEGAL PRECEDENT

“The 1984 Sony-Betamax case affirmed the idea a subscriber can time-shift for personal use,” said David Ellen, general counsel for Cablevision.

The home recording made possible by TiVo Inc. and other digital video recorder providers fell under the same ruling, Ellen said. The “personal use” thesis applies here because the consumer, not the network operator, remains in control of recording, watching and deleting programming, he said.

“We spent hundreds and hundreds of hours talking to the top intellectual property lawyers in the country,” Ellen said, making sure Cablevision was on solid ground before launching the service.

Cable programming executives said they could not comment on the Cablevision trial, citing a lack of information. But one network programming executive reserved judgment on the legality of Cablevision's move.

“There are potential copyright issues and Cablevision could end up having to go to us programmers to license content,” said the executive, who.

Rutledge said he believed that programmers are growing more comfortable with the digital video recorder for several reasons, though. First, Nielsen Media Research will soon generate ratings from programs that consumers record and watch later. That could allow programmers to charge higher advertising rates when digital video recording viewing is added into regular TV viewing.

Digital video recorders also can expand viewership, allowing consumers to watch programs they would not have otherwise seen, Rutledge said. For instance, Rutledge said he now watches Comedy Central's The Colbert Report via digital video recorder. He wouldn't stay up late enough to watch it.

“I'm still a believer,'' said longtime Time Warner Cable executive Jim Chiddix, who spearheaded Mystro's network recording efforts. “Network-based [digital video recording] is a very compelling idea.”

Chiddix, now chairman and chief executive officer of OpenTV Inc., which makes software allowing cable companies and direct-broadcast satellite companies to offer interactive services to customers, said network digital video recording would allow programmers to replace ads or insert targeted ads, something that can't be done with set-top digital video recorders.

“It's important this is moving forward,” he said. “This kind of TV viewing will happen.”

Digital recording inside the network also has capital expenditure benefits. Cablevision counts more than 4.5 million digital set-tops in its 2.1 million homes that have purchased digital service. That's 4.5 million set-tops that it doesn't have to replace, to turn them into recording devices.

Each of those set-tops would instantly have recording capability, through the remote control in a viewer's hand.

Customers who sign up for the remote-storage DVR service will receive a new remote control, Rutledge said, to activate the service. Consumers will have full pause, rewind and fast-forward capabilities and will be able to keep programs in their storage binds as long as they want.

Currently, Cablevision has to swap out set-top boxes with hard drives in them, for ones that did not, when customers take up digital recording.

Those hard drives can add $100 to $150 to the cost of a box. And an old box has to be redeployed or discarded.

Plus, there can be the cost of sending out a technician in a vehicle at a cost of $60 or more to make the switch. And later truck rolls if the hard drives in the set tops fail.

With remote storage, Rutledge said, Cablevision eliminates those issues. “We can do it more efficiently.”

Cablevision provides Scientific-Atlanta Inc. digital video recorders to homes that request it. But Cablevision has been hesitant to market the boxes agressively — particularly in comparison to the New York market's other dominant MSOs, Time Warner Cable and Comcast Corp. — because of the costs involved.

Digital recording traffic will look a lot like video-on-demand traffic in a cable network, said Wilt Hildenbrand, senior advisor of engineering and technology at Cablevision.

BANDWIDTH APLENTY

Hildenbrand said Cablevision hasn't run up against bandwidth constraints with the current amount of on-demand traffic it handles. “And storage is pretty easy to add,'' he said.

Rutledge said if 100 people record a popular show such as ABC's Lost, an equal number of copies of Lost will be kept on Cablevision servers. Content can't be shared, in order to stay true to the copyright issue, Rutledge said.

Although that might seem like a waste of storage it's a small price to pay, Cablevision executives say.

Monthly fees for the network-based recording service have not been set. Today, Cablevision offers customers set top boxes with either standard-definition or high-definition recording capabilities, at $9.95 a month.

Recording a show on a network's server and playing it back is essentially another form of video on demand. “The VOD platform lends itself to a variety of uses,” Rutledge concluded.

NETWORK RECORDING: The Benefits

  • All digital recording handled at headend

  • No home installations necessary.

  • No repairs or replacements.

  • Ads can be inserted into each playback

September