LOS ANGELES – Four Hollywood studios and the three major television networks filed a copyright suit on Wednesday seeking to prevent Cablevision Systems Corp. from launching an "on-demand" service that aims to replace the living room digital video recorder.
The suit, filed in U.S. District Court in Manhattan, says Cablevision (CVC) would run afoul of copyright law with its plan to allow subscribers to store and play back TV programs through computer servers controlled by the cable TV operator.
Individual consumers have long been free to record TV shows, movies and music for personal use. But Cablevision's so-called Network DVR service has raised objections from some content providers who say it puts control over their material into the hands of another company that has not paid for or licensed it.
"Cablevision is actually copying, storing and retransmitting it," said Kori Bernard, a spokeswoman for studio industry group the Motion Picture Association of America. "A commercial entity can't establish a for-profit, on-demand service without authorization from copyright owners whose content is used on that service," she said.
Existing video-on-demand services offered by rival Comcast Corp. (CMCSA) or satellite TV provider DirecTV Group Inc. (DTV) allow customers, at their leisure, to watch specific shows licensed from TV networks and studios, as do Internet download sites such as Apple Computer's (AAPL) iTunes store.
Cablevision executives insist their proposed service would function more like TiVo because it enables individual subscribers, not the cable operator, to choose which programs to record and play back, with a technology that is cheaper than conventional DVRs.
And even though the material they copy is stored on a server located at Cablevision's facilities, each customer has a dedicated electronic space for the content they record, the company has said.
"This lawsuit is without merit, reflects a fundamental misunderstanding of Cablevision's remote-storage DVR and ignores the enormous benefit and well-established right of viewers to time-shift television programming," the Bethpage, New York-based company said in a statement. "We hope and expect the court will allow our customer-friendly technological approach to move forward."
The nation's sixth-largest cable operator serving about 3 million subscribers in the New York metropolitan area, has set no timetable for the roll-out of its service, nor has it detailed any plans for pricing.
The debate over Cablevision's plan is being closely watched by the cable industry, including the top two U.S. providers, Comcast and Time Warner Inc. (TWX).
Earlier controversy centered on Time Warner's Maestro service, which proposed to let viewers order up just about any show that had been previously broadcast as the programs would have automatically been stored on its network without any prompting by viewers.
That plan angered content providers, and Maestro was never launched. Instead, Time Warner reworked the idea into a service it calls Start Over, which lets viewers who miss parts of a live program to start from the beginning of the show is still in progress.
The lawsuit was brought by News Corp. Ltd.'s (NWS) 20th Century Fox, General Electric Co.'s (GE) Universal Studios, Viacom Inc.'s (VIAB) Paramount Pictures, the Walt Disney Co. (DIS) and three major networks — CBS Corp. (CBSA), Disney-owned ABC and NBC, also a unit of GE.
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