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“Network DVR” – Part 2

Hank Williams over at Why Does Everything Suck? raised some excellent points about the recent appeals decision in Cablevision’s “network DVR” case.

While Redlasso can almost certainly not operate the type of clipping service they were operating, this may be an opening to a much bigger opportunity. In essence the Redlasso technology is a virtual DVR, just like what Cablevision is offering. Technically, the only difference is that the content is delivered over the Internet.

Hank raises some excellent points. I hadn’t thought about the whole “third party” aspect to this decision. If the FCC or whatever other organization deemed responsible were to mandate that the cable/satellite providers provide “access information” (i.e. what networks a consumer is entitled to DVR), it could be done very easily via an XML interface.  When a consumer signs up for DVR service with a third party, they provide their subscriber/account number.  Third party provider then makes frequent requests to the operator to determine channel accessibility, and a web interface that looks like any other channel guide could let the end user choose what program to record.

Here is where it gets sticky. For one, the cable operators have a huge advantage in the bandwidth arena over the regular internet crew. In practice, the available bandwidth on a coax cable like is run to most homes is fairly significant – this is why you can get so many HD + SD channels AND 10mbit internet. Watching network DVR provided by your cable company is no different than on-demand provided by them.

However, when you talk about a third party that is not physically attached to the cable network, they’re having to do what most people call IPTV – the video signal has to stream right through the public internet. This is a significant disadvantage for the third party provider to overcome, especially in the HD content arena.

The one possible benefit to third party providers like Redlasso is that I see them as becoming a crucial partner (or acquisition target) to the satellite companies that do not have the ability to do on-demand like cable companies do. Especially if the satellite companies continue to forge alliances with the telcos (a’la DirecTV/Bellsouth partnership here in the Atlanta area), I am sure that something interesting could be worked out.

This also probably bodes well for companies like Verizon and AT&T who are starting to provide television service in addition to their standard internet service. These organizations already have the network depth and breadth that the cable companies have, but their primary advantage is that they are also major internet backbones, which gives them a huge advantage if they additionally wanted to provide “IPTV” access to networked DVR content (although end-user bandwidth is still an issue in that scenario).

The more that this gets discussed, the more it seems like this is a great opportunity for the entire industry – content providers (networks), operators, advertisers, and consumers alike.