An appeals court has ruled that network DVRs — devices that record video at a central server outside the home — are not violating copyright law. This is a big victory for Cablevision, which was sued by Turner Broadcasting and the networks. And it’s likely to be a big moment in the TV business. Cable companies can now roll out DVR technology to everyone with a set-top box without having to physically install DVRs at each home. This, in theory, would boost DVR penetration to 60+ percent of TV households, which means a lot more commercials will be skipped. Plus, cable companies will be able to dynamically insert their own ads inside recorded shows. And finally, network DVRs can just record basically everything, which means viewers don’t have to anticipate what they want to watch ahead of time.
Cablevision calls it a “transformative opportunity,” and there’s no wonder why the networks sued the cable company in the first place. If you do a little math, this gets to be a scary proposition. TiVo said the other day that its subscribers skip 66 percent of primetime ads. Assuming a 60 percent penetration rate of DVRs, that equals 40 percent of all primetime ads would be skipped. Also, in my opinion, this puts the cable companies back in the game in the growing battle between cable TV and online video.