Monday a federal appeals court overturned a lower court ruling that prohibited Cablevision from offering "Network DVRs". This technology allows cable customers to time shift programs and skip ads without a set top box, eventually allowing pretty much anyone with cable to easily and less expensively enjoy the ad-free viewing a DVR allows.
This Network DVR system reduces cable companies capital costs, and could potentially mean much larger cash flow. Ultimately it means many more people will be able to access DVRs. Cablevision's stock got a bit of a bump from the news.
Cablevision's argument: there's no difference between a standard DVR, and their remote storage system, which works entirely through their cable system, so they shouldn't be required to pay licensing fees. But this has content companies up in arms. Media giants including CNBC's parent NBC, along with ABC, CBS, Time Warner's CNN and Cartoon Network, and News Corp's 20th Century Fox are saying this system violates copyright law. They're concerned the proliferation of DVS will mean many more people skip their ads, reducing their revenue stream.
And of course this is more competition for for TiVo , whose boxes do the exact same thing. Its stock traded down Monday on the news.
But this isn't over yet. Expect the media giants to appeal the ruling, and this battle to continue in higher and higher courts.
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