Is It Time to Say Goodbye to Commercials?

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Is It Time to Say Goodbye to Commercials?

Tue Aug 05, 2008 @ 12:16PM PST

By Eriq Gardner

Cablevision_2 In what could turn out to be the death of broadcast television as we know it (too dramatic?), the 2nd Circuit has issued a landmark ruling that legitimizes a technology called Remote Storage Digital Video Recorder.

When Cablevision introduced its plan in 2006 to allow subscribers to store TV programs on the cable operator's computer servers instead of on a hard-top box, much of the entertainment industry threw a fit, envisioning a TV landscape where consumers nixed commercials with absolute ease. They rushed to court to stop it.

The content industry, led by lead plaintiff the Cartoon Network, prevailed at district court on its contention that Cablevision's plan was a copyright violation.

But that was just the beginning.

Cablevision appealed and won support from telecom operators, consumer electronics manufacturers, and the Electronic Frontier Foundation.

Yesterday, the 2nd Circuit overturned the lower court's decision, saying that Cablevision's proposed system "would not directly infringe plaintiffs' exclusive rights to reproduce and publicly perform their copyrighted works."

U.S. Circuit Judge John M. Walker Jr. also concluded that “Because each RS-DVR playback transmission is made to a single subscriber using a single unique copy produced by that subscriber, we conclude that such transmissions are not performances ‘to the public,’ and therefore do not infringe any exclusive right of public performance.”

Bernstein analyst Craig Moffett says the ruling will have “seismic implications” across the media landscape, anticipating a spike in DVR usage and exacerbating the negative effects of commercial skipping on the networks’ bottom lines.

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The Hollywood Reporter, Esq. blog focuses on how the entertainment and media industries are impacted and influenced by the law. It is edited by Matthew Belloni with contributions from veteran legal reporter Eriq Gardner and others. Before joining The Hollywood Reporter, Belloni was a lawyer at an entertainment litigation firm in Los Angeles. He writes a column for THR devoted to entertainment law. Gardner is a New York-based writer and legal journalist. Send tips or comments to Matthew.Belloni@thr.com

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