NCTA: Putting the genie back in the bottle

LAS VEGAS--The U.S. cable industry appears poised, and even eager, to convince consumers they don’t want to skip ads after all.

While the proliferation of Digital Video Recorder (DVR) services have proven very popular with consumers for the ability to time-shift programming and to fast-forward through ads they don’t want to watch, the disruption of ad revenues is threatening to up-end the long-established business model for content creators, broadcasters and cable companies alike. That concern, coupled with cable’s interest in moving DVR capability into the network has produced cable services such as Time Warner Cable’s Start Over service that specifically disable the fast-forward option, even as it moves the DVR capability into the network.

Pure network-based DVR services aren’t legal in the U.S. In March, a federal court judge sided with content creators, including 20^th Century Fox, Disney and others, who had sued Cablevision over its trial network-DVR service.

Time-Warner Cable’s Start Over service uses the same basic engineering as Cablevision’s network-based DVR, President and CEO Glenn Britt said Monday at the NCTA show here, but the company has negotiated licenses with the content creators to offer their programming.

“A hundred networks have given us permission to use their content,” Britt said. “If we don’t disable fast-forwarding – what’s in it for them?”

He also maintained that while some consumers may value their DVRs for the ability to skip commercials, most value time-shifting of programming even more.

“Most people use it to view programming when they want to,” Britt said.

The Time Warner Cable CEO said he favored network-based DVRs in general. “The engineering idea is a good one, relying on central servers instead of a lot of little hard drives in people’s homes,” he said.

Comcast COO Stephen Burke agreed.

“We’ve always been in favor of [network-based PVRs],” he said. “It would be better than using your own DVR at home.”

If cable execs prove wrong about consumer preferences, it could play to the advantage of satellite operators and telecom players such as AT&T and Verizon, both of whom are offering multi-room DVR capabilities as part of their video packages. Both DirecTV and DISH Networks offer multi-room DVR capabilities, although DISH is currently embroiled in a patent battle with TiVO over its service.