The sale of The Pirate Bay probably ranks as the week’s biggest news for those of us who obsess about copyright issues, followed by the ruling that Usenet.com’s newsgroup-access service infringed on the major record companies’ copyrights and the Supreme Court’s decision not to take Hollywood’s appeal of the Cablevision (CVC) network DVR ruling. But two other developments in U.S. courts seem more important to the average music fan because of the potential they have for disrupting digital services.

Read the rest of this post on the original site

With a victory at the Supreme Court on the issue of network DVR, the next question for Cablevision (CVC) is going to be how to proceed with rolling out service. And the answer is, they are going to move carefully in an effort not to step on the toes of advertisers.

The issue is this: network DVR, or remote-storage DVR, has the potential to significantly increase the number of consumers who record programs for later viewing. That heightens the worries of the content providers about ad skipping. And it certainly is not Cablevision’s intent to alienate its advertisers. On the other hand, neither is the company likely to want to risk irritating consumers by crippling the service by simply preventing fast-forwarding through ads.

Read the rest of this post on the original site

The U.S. Supreme Court today cleared the way for Cablevision (CVC) to offer a network DVR service, allowing consumers to record copies of television programming “in the cloud,” rather than on set-top boxes.

Without comment, the court refused to review a Court of Appeals ruling that rejected claims by film studios and television networks that the network DVR approach would infringe copyrights.

Cablevision first announced plans for the service in 2006, but it has been tied up in litigation–until now. Among the companies opposed to the concept were Time Warner (TWX), CBS (CBS) and Disney (DIS).

Read the rest of this post on the original site

TiVo (TIVO) shares are up sharply after hours after a federal court in Texas upheld the company’s patents in its closely watched infringement case against EchoStar (SATS). The Judge ruled that EchoStar and DISH Network (DISH) are in contempt of court, rejected their workaround of TiVo’s patent, ordered the companies to stop using TiVo technology in its DVRs, refused to stay its previous injunction against further violations of the patent and awarded TiVo another $103 million plus interest through April 2008. DISH previously paid nearly $105 million in damages in the case.

Read the rest of this post on the original site

In a stunning ruling that has huge implications for the cable industry, the U.S. Court of Appeals in New York has cleared the way for Cablevision (CVC) to offer so-called “network DVRs,” in which consumers would be able to record video programming for future viewing “in the cloud” rather than relying on the hard-drives in their set-top boxes.

The Court of Appeals overturned a lower court ruling which concluded that network DVRs were a violation of content copyrights.

Bernstein Research analyst Craig Moffett notes this morning that the Court concurred with Cablevision’s view that by ceding control of what’s recorded to the customer, Cablevision’s network DVR model avoids direct liability for copyright infringement. “In Cablevision’s view, a network DVR is, in essence, simply a DVR with a very long cord,” he writes.

Read the rest of this post

A whole bunch of folks have sent in the “debate” that was held on the BBC Web site last week, starting with regular columnist Bill Thompson trashing Virgin Media, a U.K.-based broadband provider, for agreeing to send out warning “notices” to folks that the entertainment industry claims are file sharing. Thompson explains that he’s been known to use BitTorrent to get a copy of a TV show he missed on TV and forgot to record on his DVR, wondering why this should be a problem.

Read the rest of this post

At D5 last week, we announced our new RealPlayer, which makes it easy for anyone to download video from the Internet and keep it for personal use. Not surprisingly, we’re excited about the product. But what I want to discuss today are the divergent reactions to the product and the ideas behind it–it’s basically a Rorschach ink-blot test for how people feel about Internet media and consumer choice.

People who have seen the new RealPlayer fall into two groups. The first group has two reactions–the first being “Wow, this is cool,” followed quickly by “Of course, this was inevitable.” This group believes that progress is inexorably leading to more consumer choice and empowerment, and that this is a good thing. PVRs are becoming a standard TV-viewing feature, and consumers want the same level of control when they’re using the Web. I think of this as the “Manifest Destiny” group.

Different members of the Manifest Destiny group get excited about different aspects of the new RealPlayer. Idealists get excited either because they love how this technology empowers consumers, or because they have ideas that they want to propagate. The more business-oriented people in this group are excited about wrapping new business models around this expanded consumer choice. And of course techies want to know how it all works.

The second group also has two reactions (if they’re being honest). The first is “Wow, this is cool, but…” followed quickly by “Won’t this destroy” some sacred cow, typically an existing media business model. I call this group the “Flat Earth society” (and not in a Thomas Friedman sense).

This group typically asks a lot of questions about how the new RealPlayer works, seeking to find some fatal flaw. They ask questions about digital-rights management and the legality of downloading videos. We then explain the details, particularly how we respect DRM and how careful we’ve been in creating a product that has numerous substantial noninfringing uses. Indeed, the new RealPlayer is completely legal, just like a PVR, VCR or photocopier. After hearing our explanation, this group tends to sidle away glumly, kind of like Washington Generals fans learning the results of their team’s latest match against the Harlem Globetrotters.

The most surprising thing isn’t that both groups exist–having worked in Internet digital media for a dozen years, I know this dichotomy well. What’s truly shocking is how much the ground has shifted over the past two years.

Two years ago, the world seemed kind of split down the middle, with technologists on one side (Manifest Destiny) and content providers on the other (Flat Earth). But that’s not the case anymore.

To my surprise, of the people we’ve talked to so far, the Manifest Destiny group outnumbers the Flat Earth society by at least five to one. More shocking, even inside large media companies, Manifest Destiny thinking is not only ascendant but, in most cases, it’s carrying the day.

Why the big change? I think it has to do with the fundamental nature of media business models. Media businesses are generally based on accumulating the biggest audience possible, which means going where the audience is. Approaches based on locking down the content out of a fear of piracy are self-defeating. Media isn’t like water or oil, where there is fixed demand. Rather, the more prominent and available media is, the more the media gets consumed.

Successful media companies are generally made up of smart executives who get this. They know that simply trying to stop disruptive consumption patterns hurts much more than it helps. Indeed, the continuing free fall of the music industry, even after the industry’s many legal victories against P2P sites, speaks to the downside of misunderstanding this reality.

That doesn’t mean that DRM is 100% irrelevant, or that content-distribution windowing is going to go away, or that rights holders will no longer get paid for their content. But it does mean that embracing the consumer has got to be job No. 1 for everyone. When a great technology comes along–empowering consumers to download and save video, in this case–the winning approach for everyone is to embrace the technology, and then figure out the business models that work best with the technology.

In other words, the world isn’t flat, and more consumer choice and control really are Manifest Destiny.