SharkJumping

recently announced that it would soon begin testing a network DVR which would allow their cable subscribers to record tv shows to Cablevision's back-end systems, and then stream them to the actual cable set top box, just as if the subscriber had recorded them on a separate DVR box on top of their TV.  The primary advantage to Cablevision is that they can deploy much cheaper set top boxes since there is no need for a hard drive, which both costs more money and has a greater chance of failure, as anyone with a DVR finds out at least once every couple of years.  Assuming the cable network can handle it, it's pretty cool from a subscriber perspective as well, although one worries that Cablevision won't allow commercial-skipping, or will somehow control the content in a way a Tivo user doesn't like.  So what's the downside?

Well...there once was this digital music company called MP3.com which was doing really well until they launched a similar service called MyMP3.com - this service allowed users who verified that they owned the CD to immediately access it online from a MP3 storage locker - they didn't have to rip it themselves and upload it a server.  The end result was a set of lawsuits, about $170M in legal settlements, and the eventual sale of the company.  I'm not a lawyer, but the crux of the case was that the court determined that MP3.com didn't have the right to rip and store music CD's on its central servers, even if they made the content available only to users who they determined to be rightful owners of the physical CD.  What's the difference here?

According to this Reuters Tom Rutledge, COO of Cablevision, makes the point that Cablevision will not pre-record any shows until the subscriber pushes the button to trigger the recording, just like with a standard DVR.  In MP3.com's case, they pre-recorded all of the content, and then made it available upon verification.  It's a subtle, but potentially important distinction when looking at new copyright law.   However, I can't imagine that every content provider is going to let this happen, so I would expect at least one lawsuit, and the problem is that the potential penalties are quite large, so it will be an interesting situation to watch.