Why the Court's Decision on Virtual DVRs Matters to Marketers

For Starters, Expect More Time-Shifted TV Content

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Josh Bernoff
Josh Bernoff
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The U.S. Supreme Court decided on Monday to let stand a ruling that Cablevision can go forward with its virtual DVR product.

Let me explain what this is and what it means for marketers.

Cablevision's service works just like a DVR but uses storage on the company's VOD servers instead of a hard drive in your home. So when you ask to record "Hung" on HBO, the company makes a recording on its servers; it needs only one recording to serve all the people with the same request. Works just like a DVR otherwise.

When Cablevision told me about this product in 2006 (in advance of the general announcement) I told them, "You will get sued." They knew that, of course. And it has taken three years to get the legal issue resolved, which is fast as these things go.

Here's why this product is more than just a DVR with no disk.

  1. They don't have to put limits on disk space. Since everyone is sharing the same recordings, there's no reason to limit you to 100 or 1,000 hours of recorded content, in high definition. No limits.
  2. Retroactive recording. No more "Damn, I wish I'd thought of recording that." They could, in theory, allow you to ask to record something that's already passed. Or when you find out about a program on episode four, why not ask to see the previous three episodes.
  3. Un-delete. Assume deleted programs hang around for 12 months. When you ask to delete something, they just take it off your recorded programs list. If you want it back later, just ask to see it again.
None of these features have been announced, and some might be subject to further suits. But it's possible that, within two years, all of these features will be available to all digital customers, not just on Cablevision but on Comcast, Time Warner Cable, Cox, and the TV services of AT&T and Verizon. Why? Because they can do this, and DirecTV and Dish Network can't. And differentiation from satellite is a big problem for cable operators.

If you're an advertiser, this means a whole lot more customers are about to get DVR service. Not one at a time when they upgrade, but en masse, system by system. If cable is smart, they will give everybody a free level of this service, as a taste, and then encourage them to upgrade (the "Freemium" model).

Commercials will become optional for many more people and on nearly every program.

If you advertise on TV, this could be a problem.

It's all part of the transition to video available on any device, anytime -- Omnivideo, you might say.

I'd also say it's time to figure out how to make your commercials more engaging and interactive, on those same digital TV systems. Can you Canoe? Better learn how soon.

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Josh Bernoff is the co-author of "Groundswell: Winning in a World Transformed by Social Technologies," a comprehensive analysis of corporate strategy for dealing with social technologies such as blogs, social networks and wikis, and is a VP-principal analyst at Forrester Research. He blogs at blogs.forrester.com/groundswell.

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