Cablevision Gets Sued By Movie Studios For Copyright Infringement

August 6, 2007 by Michael Law
Filed under: Copyright Law

Ya gotta love cable companies. They’ll try any way to make a buck. Unfortunately for you and me, this one didn’t work. The movie studios say it’s fortunate it didn’t work, but you can be the judge. Here’s the skinny: New York’s Cablevision System Corp., a cable company with just over three million subscribers, rented Network Digital Video Recorders to its customers.

Sure, you say, that’s nothing new, and you’d be right. But only partly right.

Cablevision’s NDVR had a unique feature that no other DVR has. It connects to the servers at the cable company. Imagine a virtually unlimited library of videos. All television shows. All movies. All documentaries. OK, forget the documentaries. I was sold when they said movies. You pay Cablevision for access to their video library, and when Cablevision bought the movie, it had already paid the movie studio royalties, and presumably the movie studios then paid the actors.

At least that was the way it was supposed to work.

Until the movie studios (Twentieth Century Fox, Paramount Pictures, NBC Studios, CNN and Turner Broadcasting System) sued Cablevision. Apparently Cablevision didn’t pay the movie studio for each time one of its subscribers downloaded one of its movies to one of its NDVRs. Now think about how creative this solution is. Cablevision bought and paid for the movie. Cablevision put the movie on its network servers. Cablevision then rented its NDVRs to you and me.

In other words, the movie was always on a Cablevision-owned piece of equipment. It argued, therefore, that it didn’t have to pay another royalty to the movie studios each time the movie was moved from one piece of its equipment to another piece of its equipment.

Not surprising, the movie studios didn’t see it that way. They argued that they were due a royalty each time the movie was viewed, much like Netflix or a movie rental store does.

In a ruling last Thursday, the judge ruled in favor of the movie studios, and said the setup violated copyright laws.

Cablevision is considering an appeal. Someday, someone will figure out a way to create a Library of Congress-style video library.

Until then, hope springs eternal.

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