A recent judge’s decision will have a major effect on how cable operators connect with the network-based digital video recorder, or nDVR
Different approaches. Different results.
That pretty much sums up the comparison of Time Warner Cable’s “Start Over” service with Cablevision Systems Corp.’s ambitious (and controversial) attempt at what it was calling the “Remote Server-DVR,” or RS-DVR–arguably the two highest-profile network DVR projects in the cable industry.
On one hand, Time Warner Cable–in the initial phase of what will most certainly evolve into a more flexible and more far-reaching nDVR service–went out of its way to carve out deals and relationships with networks and programmers before it took the next step of enabling shows for Start Over.
The initial, promising results of Start Over are now paving the way toward a developing, new service called “Look Back.”
Judge’s decision derails ‘RS-DVR’
Late last month, the judge presiding over a case central to Cablevision’s approach sided with a phalanx of programmers, studios and networks, which had argued that the MSO’s RS-DVR concept breached copyright laws.
Cablevision is considering an appeal of that decision. Cablevision had argued that its approach is protected by the 1984 Sony Betamax case, which held that consumers are allowed to record copyrighted material for fair, private use.
In a decision handed down March 22, 2007, U.S. District Court Judge Denny Chin sided with the plaintiffs in the case, which sought an injunction and a declaratory judgment that Cablevision’s RS-DVR would violate their copyrights. Those plaintiffs included Disney, Twentieth Century Fox, Paramount Pictures, The Cartoon Network, CNN, CBS Broadcasting, Turner Broadcasting System, and NBC Studios, among others.
“I conclude that Cablevision, and not just its customers, would be engaging in unauthorized reproduction and transmissions of plaintiffs’ copyrighted programs under the RS-DVR,” Judge Chin wrote in the decision.
Under the RS-DVR model, customers would rent out space on network servers and have access only to programs that they recorded there manually. If 100 customers requested to copy The Sopranos, for example, the system would make 100 individual recordings. In many respects, Cablevision said the technology of the RS-DVR was identical to widely-deployed home-side, set-top storage DVRs.
Judge Chin countered that argument in his decision, concluding that the RS-DVR “is not a stand-alone machine that sits on top of a television. Rather it is a complex system that involves an ongoing relationship between Cablevision and its customers.”
Chin further countered Cablevision’s argument that the MSO would be protected because customers–not the operator–are doing the act of copying of programs, much as they would with traditional, set-top-based DVR.
“We are disappointed by the judge’s decision, and continue to believe that remote-storage DVRs are consistent with copyright law and offer compelling benefits for consumers–including lower costs and broader availability of this popular technology,” said Cablevision’s prepared statement immediately following the judge’s decision. “We are currently reviewing the opinion and assessing all of our options, including appeal, while we continue to deploy conventional set-top box DVRs.”
Cablevision said it has deployed about 500,000 conventional set-top-based DVRs. It reported having 2.4 million digital subscribers at the end of 2006.
Although the judge’s decision will, in a way, hinder the ability of operators to fully leverage their VOD systems, the “big picture,” according to C-COR SVP of Advanced Global Technology Joseph Matarese, is to build and maintain an ad model that works for all parties.
“The best way to make everyone happy–advertisers, programmers and operators–is to aggressively build the advertising component for on-demand TV and to finally figure out a revenue share between operators and programmers that causes the programmers to free up rights,” Matarese said, in a prepared statement.
As addressed in his paper, Concurrent Computer Corp. Director of Advanced Engineering Michael Pasquinilli says targeted ads and switched digital video capabilities are positioned to play a key role in the nDVR. With that capability, it follows that an operator can replace a stale ad with a relevant one–and give programmers an economic incentive to participate in the nDVR food chain.
While ad insertion for digital has been driving phenomenal revenues, “now think how to get targeted ads into switched [broadcast] and VOD,” says Basil Badawiyeh, vice president of on demand strategy at C-COR. “That’s a big opportunity as well.”
Judge Chin’s decision will likely give further credence to Time Warner Cable’s approach with Start Over and its forthcoming “Look Back” service.
Other People’s property
MSOs that are considering a Start Over-like service of their own had better start becoming familiar with the technology behind it–namely that belonging to Time Warner Cable.
That’s because Time Warner Cable has patented the intellectual property used to enable Start Over. That technology, TWC’s Bob Benya says, is highly independent of the underlying program guide.
And it appears that the operator has the attention of interested parties.
“We have been approached by other MSOs on how we can work together,” Benya says, but wouldn’t elaborate on those conversations.
Concurrent, meanwhile, hopes to help other operators fill in those gaps with technology that can time-shift news programs or some programming in the primetime window. It’s looking at that segment with some menu-driven screen overlays coupled with the necessary backoffice tools that determine which programs are okay to record for later playback.
“We’re seeing that there’s a lot of interest in that [capability],” Concurrent’s Michael Pasquinilli says.
BendBroadband of Oregon is already pushing down the localized nDVR path. Last year, the company introduced a localized nDVR service that tapped C-COR’s Local On Demand Packager (LODP), which handles the ingest and metadata of content in real-time. Initially, the operator is leveraging the system to support local news programs, with expectations to expand that to include city council meetings, cooking shows and high school sports. –JB
‘Start Over’ update
As of this writing, TWC had Start Over available across the footprint of five sites. At least another two (including some properties absorbed via recent acquisitions) have not yet been named, though they already have the capability installed along with the necessary streaming capacity to deal with usage peaks. Another 10 to 12 additional sites are budgeted.
The aggressive stance with Start Over, of course, stems from the success it has found in its initial rollout.
“Start Over is the number one requested service,” says Bob Benya, Time Warner Cable’s SVP of on demand and interactive television, pointing to the MSO’s most recent round of video roadmap research.
Benya says Start Over has gotten easier for the operator to install as it gets more and more familiar and comfortable with the technology. Applying the real-time acquisition system in the headend to enable Start Over “has become somewhat trivial for our engineers at this point,” Benya says.
The harder part, he notes, is the resizing of service groups. These days, TWC resizes those groups to 500 tuners (not homes). That’s because the operator has to keep a more assiduous eye on on-demand usage. These days, each home might have on the order of two to three tuners, with more than one set-top using a VOD stream at a given time.
Because of the expected increase in simultaneous usage, the rule of thumb contention build out for Start Over is approximately double what it is in a more traditional VOD system. But that still gives the operator some headroom.
According to some internal research, Time Warner is finding that consumers are biased–or at least tend to prefer–watching channels with the Start Over feature. The MSO, in turn, is starting to share those findings with programmers, and is starting to see more networks approach Time Warner about Start Over, than the other way around.
“We’re bullish that...this is the right feature at the right time,” Benya says. “And programmers are learning about it, and the value of it.” And what is that value? To the operator, indications are that Start Over is having an impact on digital retention, as well as on digital acquisition.
To make the networks happy (so they, in turn, can keep their advertisers happy), Start Over does not allow users to fast-forward. Disabling that feature has been a non-issue with customers.
“They like the fact that it’s free on all digital cable boxes...and they get a lot of value,” Benya says. “The fast-forwarding and ad skipping thing is completely overblown. If someone thinks they need to do that, they can subscribe to the DVR. Nobody’s holding them back.”
A glance at ‘Look Back’
Look Back, like Start Over, will be a feature that is embedded into Time Warner Cable’s on-channel mini menu. Fundamentally, programming featured in Look Back will be tied to the channel being viewed at the given time. If a customer is watching CNN, for example, the Look Back feature will only offer shows specific to CNN.
Time Warner Cable has also reconfigured the amount of time a Look Back program stays on the server. Previously, that discussion involved windows in the range of two weeks. Now, the Look Back window will include programming that was shown earlier in the same day, presumably to ensure that ads (and programming promotions) shown during those programs remain relevant.
Time Warner expects to begin Look Back trials this year. The MSO isn’t ready to reveal which programmers will be part of it, but the number of channels and the amount of programming will be “respectable,” Benya says.